Before preparing financial statements for the current year, the chief accountant for Blossom Company discovered the following errors in the accounts. The declaration and payment of $56,000 cash dividend was recorded as a debit to Interest Expense $56,000 and a credit to Cash $56,000. 1. A 10% stock dividend (1,200 shares) was declared on the $13 par value stock when the market price per share was $18. The only entry made was Stock Dividends (Dr.) $15,600 and Dividend Payable (Cr.) $15,600. The shares have not been 2. issued. A 4-for-1 stock split involving the issue of 372,000 shares of $5 par value common stock for 93,000 shares of $20 par value common stock was recorded as a debit to Retained Earnings $1,860,000 and a credit to Common Stock $1,860,000. 3.

Before preparing financial statements for the current year, the chief accountant for Blossom Company discovered the following errors in the accounts. The declaration and payment of $56,000 cash dividend was recorded as a debit to Interest Expense $56,000 and a credit to Cash $56,000. 1. A 10% stock dividend (1,200 shares) was declared on the $13 par value stock when the market price per share was $18. The only entry made was Stock Dividends (Dr.) $15,600 and Dividend Payable (Cr.) $15,600. The shares have not been 2. issued. A 4-for-1 stock split involving the issue of 372,000 shares of $5 par value common stock for 93,000 shares of $20 par value common stock was recorded as a debit to Retained Earnings $1,860,000 and a credit to Common Stock $1,860,000. 3.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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