Jan. 10 - Split the common stock 4 for 1 and reduced the par from $100 to $25 pe

Question

Jan. 10 - Split the common stock 4 for 1 and reduced the par from $100 to $25 per share. After the split, there were 500,000 common shares outstanding.
March 1 - Declared semiannal dividends of 1.20 on 80.000 shares of preferrred stock and $.24 on the 500,000 shares of $25 par common stock to stockholders of record on March 31, payable on April 30.
Apr. 30 - Paid the cash dividends.
July 9 - Purchased 75,000 sharees of the corporation's own common stock at $26, recording the stock at cost.
Aug. 29 - Sold 40,000 shares of treasury stock at $32, receiving cash.
Sept 1 - Declared semiannual dividends of $1.20 on preferred stock and $.15 on common in addition a 1% common stock dividend was declared on common stock outstanding to be capitalized at the fair market value of the common stock estimated at $30.

Explanation / Answer

Cash

Treasury Stock 

Stock Dividends Payable

10-Jan Memorandum Entry. No J/E required                  1-Mar Retained Earnings   216,000.00          Cash Dividends Payable     216,000.00   (To record the Dividends declared ;         Preferred Dividends : 96,000         Common Stock Dividends : 120,000)                 30-Apr  Cash Dividends Payable   216,000.00    

Cash

    216,000.00           9-Jul Treasury Stock    1,950,000.00                          Cash     1,950,000.00           29-Aug Cash   1,280,000.00    

Treasury Stock 

    1,280,000.00           1-Sep Retained Earnings   171,000.00          Cash Dividends Payable     171,000.00   (To record the Dividends declared ;         Preferred Dividends : 96000         Common Stock Dividends :75000 )                 1-Sep Retained Earnings   150,000.00    

Stock Dividends Payable

    150,000.00                    

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