Avatar Corporation's stockholders' equity section at December 31, 2020 appears below: Stockholder's equity Paid-in capital Dr Cr 6/30/2021 Stock Dividends 154000 Common stock, $10 par, 55,000 outstanding 550000 Common Stock Dividends Distrutable 110000 Paid-in capital in excess of par 140000 Paid-in Capital in Excess of Par-Common Stock 44000 Total Paid-in Capital 690000 Retained Earnings 150000 7/15/2021 No Entry Total Stockholder's Equity 840000 NoEntry On June 30, 2021, the board of directors of Avatar Corporation declared a 20% stock dividend, payable on July 31, 2021, to stockholders of record on July 15, 2021. The fair value of Avatar Corporation's stock on June 30, 2021, was $14. 7/31/2021 Common Stock Dividends Distributable 110000 Common Stock 110000 12/1/2021 No Entry On December 1, 2021, the board of directors declared a 2 for 1 stock split effective December 15, 2021. Avatar Corporation's stock was selling for $20 on December 1, 2021, before the stock split was declared. Par value of the stock was adjusted. Net income for 2021 was $180,000 and there were no cash dividends declared. No Entry 12/15/2021 No Entry No Entry
Avatar Corporation's stockholders' equity section at December 31, 2020 appears below: Stockholder's equity Paid-in capital Dr Cr 6/30/2021 Stock Dividends 154000 Common stock, $10 par, 55,000 outstanding 550000 Common Stock Dividends Distrutable 110000 Paid-in capital in excess of par 140000 Paid-in Capital in Excess of Par-Common Stock 44000 Total Paid-in Capital 690000 Retained Earnings 150000 7/15/2021 No Entry Total Stockholder's Equity 840000 NoEntry On June 30, 2021, the board of directors of Avatar Corporation declared a 20% stock dividend, payable on July 31, 2021, to stockholders of record on July 15, 2021. The fair value of Avatar Corporation's stock on June 30, 2021, was $14. 7/31/2021 Common Stock Dividends Distributable 110000 Common Stock 110000 12/1/2021 No Entry On December 1, 2021, the board of directors declared a 2 for 1 stock split effective December 15, 2021. Avatar Corporation's stock was selling for $20 on December 1, 2021, before the stock split was declared. Par value of the stock was adjusted. Net income for 2021 was $180,000 and there were no cash dividends declared. No Entry 12/15/2021 No Entry No Entry
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
If the Common Stock split when the stock was at $20/share and the par was adjusted before the split, I reasoned that par was going to remain the same after the split. I thought the Common Stock and Oustanding shares was going to be doubled, and the paid-in capital would remain the same. Please provide explanation per the attached images for the 6 questions.
Transcribed Image Text:Fill in the amount that would appear in the stockholders' equity section for Avatar
Corporation at December 31, 2021, for the following items:
1 Common Stock
2 Number of Shares Outstanding
3 Par value per Share
4 Paid-incapital in excess of par
5 Retained Earnings
6 Total stockholders' equity
Transcribed Image Text:Avatar Corporation's stockholders' equity section at December 31, 2020 appears below:
Stockholder's equity
Dr
Cr
Paid-in capital
Common stock, $10 par, 55,000 outstanding
Paid-in capital in excess of par
6/30/2021 Stock Dividends
154000
550000
Common Stock Dividends Distrutable
110000
140000
Paid-in Capital in Excess of Par-Common Stock
44000
Total Paid-in Capital
690000
Retained Earnings
150000
7/15/2021 No Entry
Total Stockholder's Equity
840000
NoEntry
On June 30, 2021, the board of directors of Avatar Corporation declared a 20% stock
dividend, payable on July 31, 2021, to stockholders of record on July 15, 2021. The fair
value of Avatar Corporation's stock on June 30, 2021, was $14.
7/31/2021 Common Stock Dividends Distributable
110000
Common Stock
110000
12/1/2021 No Entry
On December 1, 2021, the board of directors declared a 2 for 1 stock split effective
December 15, 2021. Avatar Corporation's stock was selling for $20 on December 1, 2021,
before the stock split was declared. Par value of the stock was adjusted. Net income for
2021 was $180,000 and there were no cash dividends declared.
No Entry
12/15/2021 No Entry
No Entry
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