Looking for the full answer Problem 11-8A On January 1, 2014, Everett Corporatio
ID: 2478716 • Letter: L
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Problem 11-8A
On January 1, 2014, Everett Corporation had these stockholders’ equity accounts.
Common Stock ($10 par value, 87,500 shares issued and outstanding)
$875,000
Paid-in Capital in Excess of Par Value
513,500
Retained Earnings
609,100
During the year, the following transactions occurred.
Jan. 15
Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15.
Feb. 15
Paid the dividend declared in January.
Apr. 15
Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share.
May 15
Issued the shares for the stock dividend.
Dec. 1
Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2015.
Dec. 31
Determined that net income for the year was $424,900.
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Problem 11-8A
On January 1, 2014, Everett Corporation had these stockholders’ equity accounts.
Common Stock ($10 par value, 87,500 shares issued and outstanding)
$875,000
Paid-in Capital in Excess of Par Value
513,500
Retained Earnings
609,100
During the year, the following transactions occurred.
Jan. 15
Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15.
Feb. 15
Paid the dividend declared in January.
Apr. 15
Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share.
May 15
Issued the shares for the stock dividend.
Dec. 1
Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2015.
Dec. 31
Determined that net income for the year was $424,900.
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Explanation / Answer
Date Accounts and explanations Debit ($) Credit ($) Jan. 15, 2015 Dividends (87,500 shares * $0.50 per share) 43,750 Dividends payable 43,750 (To record the declaration of dividends payable in Feb.) Feb. 15, 2015 Dividends payable 43,750 Cash 43,750 (To record the payment of dividends due) Apl. 15, 2015 Retained earnings (87,500*10/100 = 8,750 shares*$15 per share) 131,250 Common stock dividend distributable (8,750 shares * $10 per share) 87,500 Paid-in capital in excess of par (8,750 shares * $5 per share) ($15 - $10) 43,750 (To record the distribution of stock dividends) May. 15, 2015 Common stock dividend distributable 87,500 Common stock 87,500 (To record issue of shares for stock dividends) Dec. 1, 2015 Dividends (87,500 shares + 8,750 shares) * $0.60 per share) 57,750 Dividends payable 57,750 (To record the declaration of dividends payable in Feb.) Dec. 31, 2015 Income summary (Net income) 424,900 Retained earnings 424,900 (To record the net income at the end of the year)
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