Lemke Corporation produces and sells plano. The Stockholders\' Equity accounts o
ID: 2547413 • Letter: L
Question
Lemke Corporation produces and sells plano. The Stockholders' Equity accounts on January 1, 2017 are as follows: Common Stock, $10 par (100,000 shares authorized, 40,000 shares issued) PIC in Excess par-Common Stock Retained Earnings Treasury Stock (10,000 shares at cost) $400,000 200,000 900,000 The following transactions occurred during the year Declared a Cash Dividend of $0.80 per share on the Common Stock outstanding. Dividend will be paid on 2/16 1/16 2/16 Paid the Cash Dividend that was previously declared on 1716 3/19 Reissued 5,000 shares of the Treasury Stock at $25 per share. 4/13 Issued 15,000 shares of Common Stock for $30 per share 803 The directors declare a 2% stock dividend distributable on 9/13. The market value is $40 per share on this date 9/13 Distributed the Stock Dividend declared on 8/03 11/17 Reissued the remaining 5,000 shares of Treasury Stock for $18 per share. 12/30 Declared a Cash Dividend of $0.90 per share on the Common Stock outstanding. The dividend will be paid on 1/30. 12/31 Closed the $80,000 credit balance of the Income Summary account 12/31 Closed the dividends accounts.Explanation / Answer
date particulars debit($) credit($)
1/16 common stock a/c dr. ($4,00,000 * $0.80 dividend) 3,20,000
to dividends payable a/c 3,20,000
(declared $0.80/share cash dividend to common stock holders)
2/16 dividends payable a/c dr. 3,20,000
to cash a/c 3,20,000
(paid the declared on 1/16)
3/19 cash a/c dr. (5000 shares * $25) 1,25,000
to treasury stock a/c (5000 shares * $20) 1,00,000
to additional paid-in-capital a/c(5000 share*$5) 25,000
(5000 shares of treasury stock reissued at $25)
4/13 cash a/c dr.(15000 shares * $30) 4,50,000
to common stock a/c(15000 shares * $10) 1,50,000
to additional paid-in-capital a/c(15000 shares *$20) 3,00,000
(15000 shares of common stock issued at $30)
8/03 retained earnings a/c dr.{(400000+150000)*2%*$40/share} 4,40,000
to stock dividends distributable a/c 4,40,000
(declared 2% stock distributable at market price of $40/share)
9/13 stock dividend distributable a/c dr. 4,40,000
to common stock a/c(11000 shares *$10/share) 1,10,000
to additional paid-in-capital a/c 3,30,000
(distributed stock dividend declared on 8/3)
11/17 cash a/c dr.(5000 shares*$18/share) 90,000
additional paid-in-capital a/c(5000 shares*$2/share) 10,000
to treasury stock a/c (5000 shares* $20/share) 1,00,000
(reissued remaining 5000 shares of treasury stock at $18/share)
12/30 common stock a/c dr.{(400000+150000)*$0.90} 4,95,000
to dividends payable a/c 4,95,000
(declared cash dividend on outstanding stock)
12/31 income summary a/c dr. 80,000
to retained eranings a/c 80,000
(closed a credit balance of $80000 of income summary account)
12/31 retained earnings a/c dr. 4,95,000
to dividends ditributable a/c 4,95,000
statement of retained earnings
for the year ended 12/31/17
particulars amount($)
retained earnings as at december,2016 9,00,000
+ common stock (400000+150000-110000) 4,40,000
+additional pic (200000+645000) 8,45,000
- dividends distributable (320000+495000) (815000)
+net income 80,000
total retained earnings 14,50,000
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