Selected transactions completed by Primo Discount Corporation during the current

Question

Selected transactions completed by Primo Discount Corporation during the current fiscal year are as follows 9 Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,201,500 common shares outstanding. Jan. Feb. 28 Purchased 40,200 shares of the corporation's own common stock at $27, recording the stock at cost May 1 Declared semiannual dividends of $0.70 on 70,500 shares of preferred stock and $0.14 on the common stock to stockholders of record on June 1, payable on July 10. Paid the cash dividends. Sold 31,600 shares of treasury stock at $33, receiving cash. Declared semiannual dividends of $0.70 on the preferred stock and $0.14 on the common stock (before the stock dividend). In addition, a 2% com mon stockdividend w outstanding. The fair market value of the common stock is estimated at $38. Paid the cash dividends and issued the certificates for the common stock dividend. Jul. Sep. Oct. 10 7 1 as declared on the Dec. 1 Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

Explanation / Answer

DR CR No entry required Treasury Stock 1085400 Cash 1085400 Cash Dividends 211932 Cash Dividends Payable 211932 70500*0.7+(1201500-40200)*0.14 Cash Dividends Payable 211932 Cash 211932 Cash 1042800 Treasury Stock 31600 Paid-in Capital from Sale of Treasury Stock 1011200 Cash Dividends 216356 Cash Dividends Payable 216356 70500*0.7+(1201500-40200+31600)*0.14 Stock Dividends 906604 Stock Dividends Distributable 596450 Paid-in Capital in Excess of Par--Common Stock 310154 (1201500-40200+31600)*2%*38 (1201500-40200+31600)*2%*25 (1201500-40200+31600)*2%*(38-25) Cash Dividends Payable 216356 Cash 216356 Stock Dividends Distributable 596450 Common stock 596450

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