West Yellowstone Outfitters Corporation manufactures and distributes leisure clo

Question

West Yellowstone Outfitters Corporation manufactures and distributes leisure clothing. Selected transactions completed by West Yellowstone Outfitters during the current fiscal year are as follows: Jan. 15. Split the common stock 4 for 1 and reduced the par from $120 to $30 per share. After the split, there were 800,000 common shares outstanding. Mar. 1. Declared semiannual dividends of $0.25 on 100,000 shares of preferred stock and $0.07 on the 800,000 shares of $30 par common stock to stockholders of record on March 31, payable on April 30. Apr. 30. Paid the cash dividends. May 31. Purchased 60,000 shares of the corporation's own common stock at $32, recording the stock 23 0031. Aug. 17. Sold 40,000 shares of treasury stock at $38, receiving cash. Sept. 1. Declared semiannual dividends of $0.25 on the preferred stock and $0.09 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding, to be capital-bed at the fair market value of the common stock, which is estimated at $40. Oct. 31. Paid the cash dividends and issued the certificates for the common stock dividend. Journalize the transactions.

Explanation / Answer

Jan 1 Memorandum entry as balance is the same: a 4-for-1 stock spilt increased the no. os shres of common stock outstanding from 200000 to 800000 and redi=uced the par value from $120 to $30 per share.

Date Accounts Title Dr Cr 1-Mar Retained Earnings $81,000 Dividend Payable-Preferred Stock $25,000 Dividend Payable-common Stock 56000 30-Apr Dividend Payable-Preferred Stock $25,000 Dividend Payable-common Stock 56000 Cash 81000 31-May Treasuary Stock 1920000 Cash 1920000 17-Aug Cash 1520000 Treasuary Stock 1280000 Paid in capital in excess- Trasuary stock 240000 1-Sep Retained Earnings $97,000 Dividend Payable-Preferred Stock $25,000 Dividend Payable-common Stock on 80000 stock 72000 Retained Earnings 320000 1-Sep Stock dividend Distributable 320000 31-Oct Dividend Payable-Preferred Stock $25,000 Dividend Payable-common Stock 72000 Cash 81000 31-Oct Stock dividend Distributable 320000 common Stock (on 80000 shares *30) 240000 Paid in capital in excess of par-Common stock 8000*10 80000

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