the following transactions took place for Dahmer Corp Jan 2 Issued 20,000 shares
ID: 2485189 • Letter: T
Question
the following transactions took place for Dahmer Corp
Jan 2 Issued 20,000 shares of $1 par value common stock for $50,000
Mar 15 Declared dividend of $3 per share on the outstanding shares of common stock to shareholders of record as of March 25.Assume that there were 50,000 shares of outstanding stock as pf March 15.
April 1 Paid dividends declared March 15
July 1 Reacquired 10,000 shares of its own stock at $9.
Sept 1 Declared and issued a 10% stock dividend on the outstanding common stock. The fair market value of a common share of Dahmer Corp was $14.
Prepare the journal entries for the above dates
Explanation / Answer
(a) Jan 2
DR Cash $50,000
Common stock $20,000
Paid-in capital in excess of par $30,000
(To record issue of common stock at premium)
(b) Mar 15
DR Dividends $150,000**
Dividends payable $150,000
(To record dividend declared)
**50,000 shares x $3
(c) Apr 1
DR Dividends payable $150,000
Cash $150,000
(To record dividend paid)
(d) July 1
DR Treasury stock $10,000**
DR Paid-in capital in excess of par $80,000**
Cash $90,000
(To record stock repurchase)
** Treasury stock par value = 10,000 x $1 = $10,000
Paid-in capital in excess = 10,000 x $(9 - 1) = $80,000
(e) Sept 1
DR Retained earnings $560,000**
Stock dividend distributable $560,000
(To record stock dividend declaration)
DR Stock dividend distributable $560,000
Common stock $40,000
Paid-in capital in excess of par $520,000
(To record issue of stock dividend)
** Stock dividend = $14 x (50,000 - 10,000) = $14 x 40,000 = $560,000
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