Question 1 The stockholders\' equity section of Benton Corporation\'s balance sh
ID: 2520382 • Letter: Q
Question
Question 1 The stockholders' equity section of Benton Corporation's balance sheet as of December 31, 2017 is as follows: Stockholders Equity Common stock, $5 par value; authorized, 1,500,000 shares; issued, 300,000 shares Paid-in capital in excess of par Retained earnings $1,500,000 820,000 3,130,000 $5,450,000 The following events occurred during 2018: 1. Jan. 5 31,000 shares of authorized and unissued common stock were sold for $8 per share. 2. Jan. 16 Declared a cash dividend of 20 cents per share, payable February 15 to stock-holders of record on February 5 3. Feb. 10 40,000 shares of authorized and unissued common stock were sold for $11 per share. 4. March 1 A 30% stock dividend was declared and issued. Fair value per share is currently S16. 5. April 1 A two-for-one split was carried out. The par value of the stock was to be reduced to $2.50 per share. Fair value on March 31 was $18 per share. 6. July 1 A 15% stock dividend was declared and issued. Fair value is currently $10 per share. 7. Aug. 1 A cash dividend of 20 cents per share was declared, payable September 1 to stockholders of record on August 21 Enter the above events into the following work sheet showing how each event affects the column. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any answer field blank. Enter o for amounts.)Explanation / Answer
Solution:
Common Stock
Item
No. of Shares Issued
Total Par Value
Paid in Capital in Excess of Par
Retained Earnings
Beginning Balance - 1/1/18
300000
$1,500,000
$820,000
$3,130,000
Event # 1 -- Jan.5
31000
$155,000
(31000*Par$5)
$93,000
(31000*3)
$0
Balance
331000
$1,655,000
$913,000
$3,130,000
Event # 2 -- Jan.16
0
$0
$0
-$331,000
(331,000 Shares x $5 * 20%)
Balance
331000
$1,655,000
$913,000
$2,799,000
Event # 3 -- Feb.10
40000
$200,000
(40000*$5)
$240,000
(40000*$6)
$0
Balance
371000
$1,855,000
$1,153,000
$2,799,000
Event # 4 -- March 1
111300
(371000*30%)
$556,500
(111300*$5)
$1,224,300
(111300*11)
-$1,780,800
(111300*16)
Balance
482300
$2,411,500
$2,377,300
$1,018,200
Event # 5 -- April 1
482300
(482,300*1)
$0
$0
$0
Balance
964600
$2,411,500
$2,377,300
$1,018,200
Event # 6 -- July 1
144690
(964600*15%)
$723,450
(144690*$5)
$723,450
(144690*$5)
-$1,446,900
(144690*$10)
Balance
1109290
$3,134,950
$3,100,750
-$428,700
Event # 7 -- August 1
0
$0
$0
-$1,109,290
(1109290*$5*20%)
Balance
1109290
$3,134,950
$3,100,750
-$1,537,990
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Common Stock
Item
No. of Shares Issued
Total Par Value
Paid in Capital in Excess of Par
Retained Earnings
Beginning Balance - 1/1/18
300000
$1,500,000
$820,000
$3,130,000
Event # 1 -- Jan.5
31000
$155,000
(31000*Par$5)
$93,000
(31000*3)
$0
Balance
331000
$1,655,000
$913,000
$3,130,000
Event # 2 -- Jan.16
0
$0
$0
-$331,000
(331,000 Shares x $5 * 20%)
Balance
331000
$1,655,000
$913,000
$2,799,000
Event # 3 -- Feb.10
40000
$200,000
(40000*$5)
$240,000
(40000*$6)
$0
Balance
371000
$1,855,000
$1,153,000
$2,799,000
Event # 4 -- March 1
111300
(371000*30%)
$556,500
(111300*$5)
$1,224,300
(111300*11)
-$1,780,800
(111300*16)
Balance
482300
$2,411,500
$2,377,300
$1,018,200
Event # 5 -- April 1
482300
(482,300*1)
$0
$0
$0
Balance
964600
$2,411,500
$2,377,300
$1,018,200
Event # 6 -- July 1
144690
(964600*15%)
$723,450
(144690*$5)
$723,450
(144690*$5)
-$1,446,900
(144690*$10)
Balance
1109290
$3,134,950
$3,100,750
-$428,700
Event # 7 -- August 1
0
$0
$0
-$1,109,290
(1109290*$5*20%)
Balance
1109290
$3,134,950
$3,100,750
-$1,537,990
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