During its first year of operations, Cole\'s Electronics Inc. completed the foll

Question

During its first year of operations, Cole's Electronics Inc. completed the following transactions relating to shareholders' equity. Jan. 5: Issued 1,000,000 shares of common stock for $25 per share. Feb. 12: Issued 20,000 shares of common stock to accountants for professional services. The articles of incorporation authorize 5,000,000 shares of common stock with a par value of $1 per share and 1,000,000 preferred shares with a par value of $100 per share. Required: Record the above transactions in general journal form. 2. The shareholders' equity of Tru Corporation includes $600,000 of $1 par common stock and $1,200,000 of 6% cumulative preferred stock. The board of directors of Tru declared cash dividends of $150,000 in 2011after paying $60,000 cash dividends in each of 2010 and 2009. Required: What is the amount of dividends common shareholders will receive in 2011?

Explanation / Answer

1.

2. Cash dividends declared in 2011 $ 150,000

Number of outstanding shares of common stock 600,000.

Divind per share = 150,000 / 600,000 = 25 cents per share.

Date Account Title Debit Credit Jan 5 Cash 25,000,000 Common stock 1,000,000 Excess over par paid-in capital 24,000,000 Feb 12 Fees for professional services 20,000 Common stock 20,000

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.