Below is the Equity section of the Reston Corporation's Statement of Financial Position as of December 31, 2021: Common Shares ($5 par value, 2,000,000 authorized, 402,000 issued, and 400,000 outstanding) $2,010,000 Capital paid in excess of par value of common 850,000 Paid-in capital in excess of treasury shares 300 Retained Earnings 3,000,000 Shares in Portfolio 12,000 Total Estate $5,848,300 1. Prepare the necessary journal entries for the following equity transactions that occurred during 2022. 2. Indicate how many outstanding shares the company has immediately after each transaction. January 5 - The company sold 15,000 previously unissued authorized shares of common stock at $8 each. March 1 - A 35% stock dividend was declared and distributed. The market value of the shares on this date was $15 each. April 1 - A 2:1 stock-split-up was declared. The market value of the shares on this date was $18 each. July 1 - A 10% stock dividend was declared and distributed. The market value of the shares on this date was $10 each. November 1 – 1,000 shares of portfolio were sold at $5.50 each.
Below is the Equity section of the Reston Corporation's Statement of Financial Position as of December 31, 2021: Common Shares ($5 par value, 2,000,000 authorized, 402,000 issued, and 400,000 outstanding) $2,010,000 Capital paid in excess of par value of common 850,000 Paid-in capital in excess of treasury shares 300 Retained Earnings 3,000,000 Shares in Portfolio 12,000 Total Estate $5,848,300 1. Prepare the necessary journal entries for the following equity transactions that occurred during 2022. 2. Indicate how many outstanding shares the company has immediately after each transaction. January 5 - The company sold 15,000 previously unissued authorized shares of common stock at $8 each. March 1 - A 35% stock dividend was declared and distributed. The market value of the shares on this date was $15 each. April 1 - A 2:1 stock-split-up was declared. The market value of the shares on this date was $18 each. July 1 - A 10% stock dividend was declared and distributed. The market value of the shares on this date was $10 each. November 1 – 1,000 shares of portfolio were sold at $5.50 each.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Below is the Equity section of the Reston Corporation's Statement of Financial Position as of December 31, 2021:
Common Shares ($5 par value, 2,000,000 authorized, 402,000 issued, and 400,000 outstanding) $2,010,000
Capital paid in excess of par value of common 850,000
Paid-in capital in excess of treasury shares 300
Retained Earnings 3,000,000
Shares in Portfolio 12,000
Total Estate $5,848,300
1. Prepare the necessary journal entries for the following equity transactions that occurred during 2022.
2. Indicate how many outstanding shares the company has immediately after each transaction.
January 5 - The company sold 15,000 previously unissued authorized shares of common stock at $8 each.
March 1 - A 35% stock dividend was declared and distributed. The market value of the shares on this date was $15 each.
April 1 - A 2:1 stock-split-up was declared. The market value of the shares on this date was $18 each.
July 1 - A 10% stock dividend was declared and distributed. The market value of the shares on this date was $10 each.
November 1 – 1,000 shares of portfolio were sold at $5.50 each.
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