Selected transactions completed by Canyon Ferry Boating Corporation during the c

Question

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows: Jan. 8 Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 123,000 common shares outstanding. Apr. 30 Declared semiannual dividends of $0.80 on 16,500 shares of preferred stock and $0.27 on the common stock payable on July 1. Jul. 1 Paid the cash dividends. Oct. 31 Declared semiannual dividends of $0.80 on the preferred stock and $0.15 on the common stock (before the stock dividend). In addition, a 3% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $51. Dec. 31 Paid the cash dividends and issued the certificates for the common stock dividend.

Explanation / Answer

Journal Entries :-

Date Particulars Debit($) Credit($) Jan 8 No Entry April 30 Dividend A/c Dr. ((16500*$0.80)+(123000*$0.27)) 46410 To Dividend Payable A/c 46410 July 1 Dividend Payable A/c Dr. 46410 To Cash A/c 46410 Oct 31 Dividends A/c Dr. ((16500*$0.80)+(123000*$0.15)) 31650 To Dividend Payable A/c 31650 Retained Earnings A/c Dr. (123000 * 3% * $51) 188190 To Common Stock Dividend Distributable A/c (123000*3%*$40) 147600 To Paid in Capital in excess of par ($188190-$147600) 40590 Dec31 Dividend Payable A/c Dr. 31650 To Cash A/c 31650 Common Stock Dividend Distributable A/c Dr. 147600 To Common Stock A/c (123000 * 3% * $40) 147600

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