On January 1, 2021, Gerlach Inc. had the following account balances in its shareholders' equity accounts. Common stock, $1 par, 250,000 shares issued$250,000 Paid-in capital—excess of par, common 500,000 Paid-in capital—excess of par, preferred 100,000 Preferred stock, $100 par, 10,000 shares outstanding 1,000,000 Retained earnings 2,000,000 Treasury stock, at cost, 5,000 shares 25,000 During 2021, Gerlach Inc. had several transactions relating to common stock. January 15: Declared a property dividend of 100,000 shares of Slowdown Company (book value $10 per share, fair value $9 per share).February 17: Distributed the property dividend.April 10: A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. (Fascom chose to reduce Paid-in capital—excess of par.) The fair value of the stock was $4 on this date.July 18: Declared and distributed a 3% stock dividend on outstanding common stock; fair value per share, $5.December 1: Declared a 50 cents per share cash dividend on the outstanding common shares.December 20: Paid the cash dividend. Required:Record the above transactions and events in journal entry format.

Answer :For this problem we have to record all transaction in Journal entry format.

Answered: On January 1, 2021, Gerlach Inc. had…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2021, Gerlach Inc. had the following account balances in its shareholders' equity accounts.


Common stock, $1 par, 250,000 shares issued	$	250,000
Paid-in capital—excess of par, common		500,000
Paid-in capital—excess of par, preferred		100,000
Preferred stock, $100 par, 10,000 shares outstanding		1,000,000
Retained earnings		2,000,000
Treasury stock, at cost, 5,000 shares		25,000

During 2021, Gerlach Inc. had several transactions relating to common stock.

January	15:	Declared a property dividend of 100,000 shares of Slowdown Company (book value $10 per share, fair value $9 per share).
February	17:	Distributed the property dividend.
April	10:	A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. (Fascom chose to reduce Paid-in capital—excess of par.) The fair value of the stock was $4 on this date.
July	18:	Declared and distributed a 3% stock dividend on outstanding common stock; fair value per share, $5.
December	1:	Declared a 50 cents per share cash dividend on the outstanding common shares.
December	20:	Paid the cash dividend.

Required:
Record the above transactions and events in journal entry format.

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