Before preparing financial statements for the current year, the chief accountant for Pharoah Ltd. provided the following information regarding the accounting for dividends and stock splits: 1 2. 3. Pharoah has 21,200, S4 noncumulative preferred shares issued. It paid the preferred shareholders the quarterly dividend, and recorded it as a debit to Dividends Expense and a credit to Cash. A 5% stock dividend (1,000 shares) was declared on the common shares when the fair value per share was S12. To record the declaration, Retained Earnings was debited and Dividends Payable was credited. The shares have not been issued yet. The company declared a 2-for-1 stock split on its 21,200, $4 noncumulative preferred shares. The average per share amount of the preferred shares before the split was 570. The split was recorded as a debit to Retained Earnings of $1,484,000 and a credit to Preferred Shares of $1,484,000.

Before preparing financial statements for the current year, the chief accountant for Pharoah Ltd. provided the following information regarding the accounting for dividends and stock splits: 1 2. 3. Pharoah has 21,200, S4 noncumulative preferred shares issued. It paid the preferred shareholders the quarterly dividend, and recorded it as a debit to Dividends Expense and a credit to Cash. A 5% stock dividend (1,000 shares) was declared on the common shares when the fair value per share was S12. To record the declaration, Retained Earnings was debited and Dividends Payable was credited. The shares have not been issued yet. The company declared a 2-for-1 stock split on its 21,200, $4 noncumulative preferred shares. The average per share amount of the preferred shares before the split was 570. The split was recorded as a debit to Retained Earnings of $1,484,000 and a credit to Preferred Shares of $1,484,000.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter13: Corporations: Organization, Stock Transactions, And Dividends

Section: Chapter Questions

Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...

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The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the current fiscal year: During the year, the corporation completed a number of transactions affecting the stockholders equity. They are summarized as follows: a. Issued 500,000 shares of common stock at 8, receiving cash. b. Issued 10,000 shares of preferred 1% stock at 60. c. Purchased 50,000 shares of treasury common for 7 per share. d. Sold 20,000 shares of treasury common for 9 per share. e. Sold 5,000 shares of treasury common for 6 per share. f. Declared cash dividends of 0.50 per share on preferred stock and 0.08 per share on common stock. g. Paid the cash dividends. Instructions Journalize the entries to record the transactions. Identify each entry by letter.
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Before preparing financial statements for the current year, the chief accountant for Pharoah Ltd. provided the following information regarding the accounting for dividends and stock splits: 1. Pharoah has 21,200, $4 noncumulative preferred shares issued. It paid the preferred shareholders the quarterly dividend, and recorded it as a debit to Dividends Expense and a credit to Cash. 2. A 5% stock dividend (1,000 shares) was declared on the common shares when the fair value per share was $12. To record the declaration, Retained Earnings was debited and Dividends Payable was credited. The shares have not been issued yet. 3. The company declared a 2-for-1 stock split on its 21,200, $4 noncumulative preferred shares. The average per share amount of the preferred shares before the split was $70. The split was recorded as a debit to Retained Earnings of $1,484,000 and a credit to Preferred Shares of $1,484,000. Determine if each of the above transactions was recorded…
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