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.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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.
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