On January 1, 2017, Ehrlich Corporation had the following stockholders’ equity accounts. Common Stock ($10 par value, 100,000 shares issued and outstanding) $1,000,000 Paid-in Capital in Excess of Par—Common Stock 200,000 Retained Earnings 540,000 During the year, the following transactions occurred. Jan. 15 Declared a $1 cash dividend per share to stockholders of record on January 31, payable February 15. Feb. 15 Paid the dividend declared in January. Apr. 15 Declared a 15% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share. May 15 Issued the shares for the stock dividend. Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2018. 31 Determined that net income for the year was $250,000. Instructions (a) Journalize the transactions and the closing entry for net income and dividends. (b) Calculate the ending balance of Retained Earnings. Show your work.
On January 1, 2017, Ehrlich Corporation had the following
Common Stock ($10 par value, 100,000 shares issued and outstanding) $1,000,000
Paid-in Capital in Excess of Par—Common Stock 200,000
During the year, the following transactions occurred.
Jan. 15 Declared a $1 cash dividend per share to stockholders of record on January 31, payable February 15.
Feb. 15 Paid the dividend declared in January.
Apr. 15 Declared a 15% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share.
May 15 Issued the shares for the stock dividend.
Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2018.
31 Determined that net income for the year was $250,000.
Instructions
(a) Journalize the transactions and the closing entry for net income and dividends.
(b) Calculate the ending balance of Retained Earnings. Show your work.
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