Listed below are the transactions that affected the shareholders’ equity of Bran
ID: 2487745 • Letter: L
Question
Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2013–2015. At December 31, 2012, the corporation’s accounts included:
November 1, 2013, the board of directors declared a cash dividend of $0.60 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
On March 1, 2014, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $2.5 million, but were purchased two years previously for $2.2 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.
On July 12, 2014, the corporation declared and distributed a 6% common stock dividend (when the market value of the common stock was $17 per share). Cash was paid in lieu of fractional shares representing 600,000 equivalent whole shares.
On November 1, 2014, the board of directors declared a cash dividend of $0.60 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
On January 15, 2015, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $18 per share.
On November 1, 2015, the board of directors declared a cash dividend of $0.45 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2013–2015. At December 31, 2012, the corporation’s accounts included:
Explanation / Answer
Journal entries that Branch-Rickie recorded during the three-year period for these transactions are shown as below:
S.no Date Particulars L.F Amount ($) in 000s Amount ($) in 000s 2013 a. Nov-01 Retained earnings 66,000 Dividend Payable 66,000 (For devidend declared) 110,000*.6 Nov-15 No entry Dec-31 Dividend payable 66,000 Cash 66,000 (For dividend paid) 2014 b. Mar-01 Investment in Bonds 300 gain on investments 300 (For gain on investment recorded) 2.5-2.2 Retained Earnings 2500 property dividend payable 2500 (for property dividend declared) Mar-13 No entry Apr-05 Property dividend payable 2500 Investment in Bonds 2500 (for property dividend distributed) c. Jul-12 Retained earnings 1870000 Common stock 103400 Additional paid in capital 1654400 Cash 112200 (For common stock dividend paid) 110000000*6% = 6600000 110000000-6600000= 103400000 d. Nov-01 Retained earnings 1,28,040 Dividend Payable 1,28,040 (For devidend declared) 110,000+103400= 213,400*.6 Nov-15 No entry Dec-31 Dividend payable 1,28,040 Cash 66,000 (For dividend paid) e. 2015 Jan-15 Retained Earning 1,06,700 Common stock 1,06,700 for 213,400*.5 common stock declared) f. Nov-01 Retained earnings 1,44,045 Dividend Payable 1,44,045 (For devidend declared) 110,000+103400+ 106700= 320,100*.45 Nov-15 No entry Dec-31 Dividend payable 1,44,045 Cash 1,44,045 (For dividend paid)Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.