The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2020: Paid-in capital: Preferred stock, 8.0%, 93,000 shares at $1 par $ Common stock, 434,300 shares at $1 par Paid-in capital-excess of par, preferred Paid-in capital-excess of par, common Retained earnings 93,000 434,300 1,545,000 2,595,000 9,245,000 (51,600) $13,860,700 Treasury stock, at cost; 4,300 common shares Total shareholders' equity During 2021, 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 265,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $772,000). 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 $12 per share. c. On July 5, a 2% common stock dividend was declared and distributed. The market value of the common stock was $12 per share. d. On December 1, the board of directors declared the 8.0% cash dividend on the 93,000 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 $0.50 per share on its common shares, payable on December 28 to shareholders of record December 20. of tho halance sheet for Consolidated Paper, Inc., at December 31, 2021. Net income for
The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2020: Paid-in capital: Preferred stock, 8.0%, 93,000 shares at $1 par $ Common stock, 434,300 shares at $1 par Paid-in capital-excess of par, preferred Paid-in capital-excess of par, common Retained earnings 93,000 434,300 1,545,000 2,595,000 9,245,000 (51,600) $13,860,700 Treasury stock, at cost; 4,300 common shares Total shareholders' equity During 2021, 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 265,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $772,000). 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 $12 per share. c. On July 5, a 2% common stock dividend was declared and distributed. The market value of the common stock was $12 per share. d. On December 1, the board of directors declared the 8.0% cash dividend on the 93,000 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 $0.50 per share on its common shares, payable on December 28 to shareholders of record December 20. of tho halance sheet for Consolidated Paper, Inc., at December 31, 2021. Net income for
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The balance sheet of Consolidated Paper, Inc., Included the following shareholders' equity accounts at December 31, 2020:
Paid-in capital:
Preferred stock, 8.0, 93,000 shares at $1 par
Common stock, 434,300 shares at $1 par
Paid-in capital-excess of par, preferred
Paid-in capital-excess of par, common
Retained earnings
Treasury stock, at cost; 4,300 common shares
ar $ 93,000
434,300
1,545,000
2,595,000
9,245,000
(51,600)
$13,860,700
16
Total shareholders' equity
During 2021, 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 265,000 shares of Leasco International common stock that
Consolidated Paper had purchased in January as an investment (book value: $772,000). 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 $12 per share.
C. On July 5, a 2% common stock dividend was declared and distributed. The market value of the common stock was $12 per share.
d. On December 1, the board of directors declared the 8.0% cash dividend on the 93,000 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 $0.50 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, Inc., at December 31, 2021. Net income for
the year was $830,000,
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