how to calculate on Dec 31 the retained earning and dividend payable ? I need th
ID: 2598428 • Letter: H
Question
how to calculate on Dec 31 the retained earning and dividend payable ? I need the calculation explanation not only the answer
On January 1, 2017, BYD Corporation was incorporated. The corporate charter grants BYD Corp. the right to issue 100,000 shares of $25.00 par value, 5% cumulative and nonparticipating preferred stock, and 2,000,000 shares of $1.00 par value common stock. It then completed these transactions. · Jan 25 Issued 1,600,000 shares of common stock at $25 per share. .Mar1 Issued to Sanchez Corp. 65,000 shares of preferred stock for the following: o Machinery with a fair market value of $650,000 o A factory building with a fair market value of $812,500 o and, land with an appraised value of $975,000 Jul 21 Purchased 192,000 shares of common stock at $18.75 per share. (Use the cost method) . Aug 15 Sold the 144,000 treasury shares at $30.00 per share. Dec 31 Closed the Income Summary account. There was a $33,950,000 net income. Dec 31 Declared a $1.20 per share cash dividend on the common stock and declared the . referred dividend (a) Record the journal entries for the transactions listed above (14 points)Explanation / Answer
(a)
Date Account Titles and Explanation Debit Credit Jan. 25 Cash (1600000 x $25) 40000000 Common stock (1600000 x $1.00) 1600000 Paid-in capital in excess of par-common stock 38400000 (To record issuance of common stock) Mar. 1 Machinery 650000 Factory building 812500 Land 975000 Preferred stock (65000 x $25) 1625000 Paid-in capital in excess of par-preferred stock 812500 (To record issuance of preferred stock for assets acquired) Jul. 21 Treasury stock (192000 x $18.75) 3600000 Cash 3600000 (To record purchase of treasury stock) Aug. 15 Cash (144000 x $30) 4320000 Treasury stock (144000 x $18.75) 2700000 Paid-in capital-Treasury stock [144000 x ($30 - $18.75)] 1620000 (To record sale of treasury stock) Dec. 31 Income summary 33950000 Retained earnings 33950000 (To close net income to retained earnings) Dec. 31 Retained earnings 1943650 Dividend payable 1943650 (To record declaration of cash dividends)Related Questions
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