Exercise 15-14 The stockholders’ equity accounts of G.K. Chesterton Company have
ID: 2425411 • Letter: E
Question
Exercise 15-14
The stockholders’ equity accounts of G.K. Chesterton Company have the following balances on December 31, 2014.
Shares of G.K. Chesterton Company stock are currently selling on the Midwest Stock Exchange at $40.
Prepare the appropriate journal entries for each of the following cases. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
No.
Account Titles and Explanation
Debit
Credit
Common stock, $10 par, 342,000 shares issued and outstanding $3,420,000 Paid-in capital in excess of par—common stock 1,220,000 Retained earnings 5,677,000Explanation / Answer
The stockholders’ equity accounts of G.K. Chesterton Company have the following balances on December 31, 2014.
Shares of G.K. Chesterton Company stock are currently selling on the Midwest Stock Exchange at $38.
Solution :
No.
Account Titles and Explanation
Debit
Credit
(a) (1)
RETAINED EARNING
622440
COMMON STOCK DIVIDEND DISTRIBUTABLE
163800
PAID UP CAPITAL IN EXCESS OF PAR
458640
(a) (2)
COMMON STOCK DIVIDEND DISTRIBUTABLE
163800
COMMON STOCK
163800
(b) (1)
RETAINED EARNING
2730000
COMMON STOCK DIVIDEND DISTRIBUTABLE
2730000
(b) (2)
COMMON STOCK DIVIDEND DISTRIBUTABLE
2730000
COMMON STOCK
2730000
(c) (1)
NO ENTRY
0
(c) (2)
NO ENTRY
0
WORKING :
A
b
c
NO OF COMMON STOCK
273000
273000
STOCK BECOMES 273000 X 2 = 546000 AND FACE VALUE BECOMES 5 PER STOCK
STOCK DIVIDEND
16380
(273000 X 6%)
273000
(273000X100%)
DIVIDEND DISTRIBUTABLE
163800
(16380 X 10)
2730000
(273000X10)
PAID IN EXCESS OF PAID UP
458640
(16380 X28)
0
Common stock, $10 par, 273,000 shares issued and outstanding $2,730,000 Paid-in capital in excess of par—common stock 1,210,000 Retained earnings 5,622,000Related Questions
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