ACCO 112-Profesor Aponte QUIZZ P14-1B On January 1, 2017, Chen Corporation had t

Question

ACCO 112-Profesor Aponte QUIZZ P14-1B On January 1, 2017, Chen Corporation had the following stockholders' equity accounts. Common Stock ($5 par value, 200,000 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $1,000,000 200,000 840,000 During the year, the following transactions occurred. Jan. 15 Declared a $1 cash dividend per share to stockholders of record on January 31, Feb. 15 Paid the dividend declared in January payable February 15. Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share. Issued the shares for the stock dividend. Announced a 2-for-1 stock split. The market price per share prior to the announcement was $17. (The new par value is $2.50.) Apr. 15 May 15 July 1 Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record orn December 15, payable January 10, 2018. Determined that net income for the year was $250,000. 31 (a) Journalize the transactions and the closing entries for net income and dividends. (b) Enter the beginning balances, and post the entries to the stockholders' equity accounts. (Note: Open additional stockholders' equity accounts as needed.) (c) Prepare a stockholders' equity section at December 31,

Explanation / Answer

a. In the books of Chen Corporation :

b. Common Stock:

Paid-in Capital in Excess of Par : Common Stock:

Retained Earnings:

c. Chen Corporation

Balance Sheet ( Partial)

December 31

Date Account Titles Debit Credit $ $ Jan 15 Retained Earnings 200,000 Dividends Payable : Common Stock 200,000 Feb 15 Dividends Payable : Common Stock 200,000 Cash 200,000 Apr 15 Retained Earnings ( 200,000 x 10% x $ 15) 300,000 Common Stock Dividend Distributable ( 200,000 x 10% x $ 5) 100,000 Paid-in Capital in Excess of Par : Common Stock 200,000 May 15 Common Stock Dividend Distributable 100,000 Common Stock 100,000 July 1 No journal entry required Dec 1 Retained Earnings 220,000 Dividends Payable : Common Stock 220,000 Dec 31 Income Summary 250,000 Retained Earnings 250,000

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