the stockholders equity action of Kardashian corporation balance sheet of decemb
ID: 2460486 • Letter: T
Question
the stockholders equity action of Kardashian corporation balance sheet of december 31,2014 appears as follows
Contributed Capital
Common Stock $4 par value,5,000.000 shares authorized,300,000 shares issued and outstanding $1,200.000
Paid capital in Excess of Par Common 1,600,000
Retained Earnings 2.000.000
Total Stockholders Equity $3,800.000
The following transactions occurred in sequence during 2015.
a Issued 10,000 shares of $100 par value,10% cumulative prefered stock at par.
b. Declared a 2 per 1 stock split on outstanding common shares
c. Bought land valued at $850,000 by using 100,000 shares of common stock.
d.Declared and issued 10% stock dividend on common stock issued ans outstanding.The market price per share of common on the stock declaration date was $9.
e.Repurchased 40,000 shares of stock at $12 per share
f. Earned net income of $970,000.
g.Declared and paid the full year`s dividends on the preferred on the stock and $1 share per share on its outstanding common share.
Make the neccesary journal entries for the above transactions
Explanation / Answer
No Account Title & Explanation Debit Credit a Cash 1000000 Preferred Stock 1000000 b No Entry c Land 850000 Common Stock 400000 Paid capital in Excess of Par-Common 450000 d Retained Earning ((300000*2 + 100000)*10%*9) 630000 Common Stock ((300000*2 + 100000)*10%*4) 280000 Paid capital in Excess of Par-Common 350000 e Treasury Stock (40000*12) 480000 Cash 480000 f Net Income 970000 Retained Earning 970000 g Retained Earning 830000 Cash Dividend-Preferred (1000000*10%) 100000 Cash Dividend-Common ((300000*2 + 100000)*1.1 - 40000)*1 730000 Cash Dividend-Preferred (1000000*10%) 100000 Cash Dividend-Common ((300000*2 + 100000)*1.1 - 40000)*1 730000 Cash 830000
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