Identifying and Analyzing Financial Statement Effects of Dividends (FSET) The stockholders' equity of Palepu Company at December 31, 2021, appears below. Common stock, $10 par value, 300,000 shares authorized: Shares issued and outstanding (1) Paid-in capital in excess of par value Retained earnings (1) 120,000 shares at $10 par value. During 2022, the following transactions occurred: May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. Using the financial statement effects template, illustrate the effects of these transactions. NOTE: Use negative signs with your answers, when appropriate. $1,200,000 720,000 450,000 NOTE: Select "N/A" as your answer if a part of the accounting equation is not affected. Transaction Declared and issued stock dividend. Declared and paid cash dividend. Cash Asset Cash Compensation expense Noncash + Assets 0✔ # X (96,300)✓ Balance Sheet Assets Liabilities + = Cash Contributed Capital Common stock Retained earnings 0x DX 0✔ x Earned Capital Retained earnings (151,200) ÷ (96,300) x Compensation expense Revenue. ✓ x Income Statement Expenses Preferred stock Common stock x Net Income
Identifying and Analyzing Financial Statement Effects of Dividends (FSET) The stockholders' equity of Palepu Company at December 31, 2021, appears below. Common stock, $10 par value, 300,000 shares authorized: Shares issued and outstanding (1) Paid-in capital in excess of par value Retained earnings (1) 120,000 shares at $10 par value. During 2022, the following transactions occurred: May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. Using the financial statement effects template, illustrate the effects of these transactions. NOTE: Use negative signs with your answers, when appropriate. $1,200,000 720,000 450,000 NOTE: Select "N/A" as your answer if a part of the accounting equation is not affected. Transaction Declared and issued stock dividend. Declared and paid cash dividend. Cash Asset Cash Compensation expense Noncash + Assets 0✔ # X (96,300)✓ Balance Sheet Assets Liabilities + = Cash Contributed Capital Common stock Retained earnings 0x DX 0✔ x Earned Capital Retained earnings (151,200) ÷ (96,300) x Compensation expense Revenue. ✓ x Income Statement Expenses Preferred stock Common stock x Net Income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ef 260.
Transcribed Image Text:Identifying and Analyzing Financial Statement Effects of Dividends (FSET)
The stockholders' equity of Palepu Company at December 31, 2021, appears below.
Common stock, $10 par value, 300,000 shares authorized;
Shares issued and outstanding (1)
Paid-in capital in excess of par value
Retained earnings
(1) 120,000 shares at $10 par value.
During 2022, the following transactions occurred:
May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share.
Dec. 31 Declared and paid a cash dividend of 75 cents per share.
Using the financial statement effects template, illustrate the effects of these transactions.
NOTE: Use negative signs with your answers, when appropriate.
$1,200,000
720,000
450,000
NOTE: Select "N/A" as your answer if a part of the accounting equation is not affected.
Transaction
Declared and issued stock dividend.
Declared and paid cash dividend.
Cash
Asset
Cash
Compensation expense
(95,300)✓
x
Balance Sheet
Noncash
Assets = Liabilities +
Cash
Contributed
Capital
Common stock
Retained earnings
0x
Dx
x
Earned
Capital
Retained earnings
(151,200)
Revenue.
(96,300)✓
+ x Compensation expense + x
Income Statement
Expenses
Preferred stock
Common stock
0 ✓
=
x
Net
Income
0
0
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