Exercise 18-23 (Algo) Transactions affecting retained earnings [LO18-6, 18-7, 18-8] The balance sheet of Consolidated Paper, Incorporated, included the following shareholders' equity accounts at December 31, 2023: Paid-in capital: Preferred stock, 8.0 %, 83,000 shares at $1 par Common stock, 333,300 shares at $1 par Paid-in capital-excess of par, preferred Paid-in capital-excess of par, common Retained earnings Treasury stock, at cost; 3,300 common shares. Total shareholders' equity $ 83,000 333,300 1,455,000 2,505,000 8,345,000 (36,300) $ 12,685,000 During 2024, several events and transactions affected the retained earnings of Consolidated Paper. Required: 1. Prepare the appropriate entries for these events: a. On March 3, the board of directors declared a property dividend of 215,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $632,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15. b. On May 3, a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share. c. On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share. d. On December 1, the board of directors declared the 8.0% cash dividend on the 83,000 preferred shares, payable on December 28 to shareholders of record December 20. e. On December 1, the board of directors declared a cash dividend of $0.40 per share on its common shares, payable on December 28 to shareholders of record December 20. 2. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Incorporated at December 31, 2024. Net income for the year was $730,000.
Exercise 18-23 (Algo) Transactions affecting retained earnings [LO18-6, 18-7, 18-8] The balance sheet of Consolidated Paper, Incorporated, included the following shareholders' equity accounts at December 31, 2023: Paid-in capital: Preferred stock, 8.0 %, 83,000 shares at $1 par Common stock, 333,300 shares at $1 par Paid-in capital-excess of par, preferred Paid-in capital-excess of par, common Retained earnings Treasury stock, at cost; 3,300 common shares. Total shareholders' equity $ 83,000 333,300 1,455,000 2,505,000 8,345,000 (36,300) $ 12,685,000 During 2024, several events and transactions affected the retained earnings of Consolidated Paper. Required: 1. Prepare the appropriate entries for these events: a. On March 3, the board of directors declared a property dividend of 215,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $632,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15. b. On May 3, a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share. c. On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share. d. On December 1, the board of directors declared the 8.0% cash dividend on the 83,000 preferred shares, payable on December 28 to shareholders of record December 20. e. On December 1, the board of directors declared a cash dividend of $0.40 per share on its common shares, payable on December 28 to shareholders of record December 20. 2. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Incorporated at December 31, 2024. Net income for the year was $730,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![**Exercise 18-23 (Algo) Transactions Affecting Retained Earnings [LO18-6, 18-7, 18-8]**
The balance sheet of Consolidated Paper, Incorporated, included the following shareholders’ equity accounts at December 31, 2023:
- **Paid-in capital:**
- Preferred stock, 8.0%, 83,000 shares at $1 par: $83,000
- Common stock, 333,300 shares at $1 par: $333,300
- Paid-in capital—excess of par, preferred: $1,455,000
- Paid-in capital—excess of par, common: $2,595,000
- **Retained earnings:** $8,345,000
- **Treasury stock, at cost; 3,300 common shares:** ($36,300)
- **Total shareholders' equity:** $12,685,000
During 2024, several events and transactions affected the retained earnings of Consolidated Paper.
**Required:**
1. Prepare the appropriate entries for these events:
- **a.** On March 3, the board of directors declared a property dividend of 215,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $632,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15.
- **b.** On May 3, a 5-for-4 stock split was declared. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share.
- **c.** On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share.
- **d.** On December 1, the board of directors declared a 10% cash dividend on the 83,000 preferred shares, payable on December 28 to shareholders of record December 20.
- **e.** On December 1, the board of directors declared a cash dividend of $0.40 per share on its common shares, payable on December 28 to shareholders of record December 20.
2. Prepare the shareholders' equity section of the balance sheet for Consolidated](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6b7e01a8-ffed-4479-9635-32fe9c58a490%2F1a9198ff-4218-4e4e-8a49-728bb7be3e2b%2Fd8o6oz_processed.png&w=3840&q=75)
Transcribed Image Text:**Exercise 18-23 (Algo) Transactions Affecting Retained Earnings [LO18-6, 18-7, 18-8]**
The balance sheet of Consolidated Paper, Incorporated, included the following shareholders’ equity accounts at December 31, 2023:
- **Paid-in capital:**
- Preferred stock, 8.0%, 83,000 shares at $1 par: $83,000
- Common stock, 333,300 shares at $1 par: $333,300
- Paid-in capital—excess of par, preferred: $1,455,000
- Paid-in capital—excess of par, common: $2,595,000
- **Retained earnings:** $8,345,000
- **Treasury stock, at cost; 3,300 common shares:** ($36,300)
- **Total shareholders' equity:** $12,685,000
During 2024, several events and transactions affected the retained earnings of Consolidated Paper.
**Required:**
1. Prepare the appropriate entries for these events:
- **a.** On March 3, the board of directors declared a property dividend of 215,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $632,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15.
- **b.** On May 3, a 5-for-4 stock split was declared. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share.
- **c.** On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share.
- **d.** On December 1, the board of directors declared a 10% cash dividend on the 83,000 preferred shares, payable on December 28 to shareholders of record December 20.
- **e.** On December 1, the board of directors declared a cash dividend of $0.40 per share on its common shares, payable on December 28 to shareholders of record December 20.
2. Prepare the shareholders' equity section of the balance sheet for Consolidated
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education