The balance sheet of Consolidated Paper, Incorporated, included the following shareholders’ equity accounts at December 31, 2023: Paid-in capital: Preferred stock, 8.5%, 96,000 shares at $1 par $ 96,000 Common stock, 464,600 shares at $1 par 464,600 Paid-in capital—excess of par, preferred 1,575,000 Paid-in capital—excess of par, common 2,625,000 Retained earnings 9,545,000 Treasury stock, at cost; 4,600 common shares (55,200) Total shareholders' equity $ 14,250,400 During 2024, several events and transactions affected the retained earnings of Consolidated Paper. Required: Prepare the appropriate entries for these events: On March 3, the board of directors declared a property dividend of 280,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $814,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15. 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. On July 5, a 3% common stock dividend was declared and distributed. The market value of the common stock was $12 per share. On December 1, the board of directors declared the 8.5% cash dividend on the 96,000 preferred shares, payable on December 28 to shareholders of record December 20. 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. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Incorporated at December 31, 2024. Net income for the year was $860,000

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

Paid-in capital:
Preferred stock, 8.5%, 96,000 shares at $1 par	$ 96,000
Common stock, 464,600 shares at $1 par	464,600
Paid-in capital—excess of par, preferred	1,575,000
Paid-in capital—excess of par, common	2,625,000
Retained earnings	9,545,000
Treasury stock, at cost; 4,600 common shares	(55,200)
Total shareholders' equity	$ 14,250,400

Prepare the appropriate entries for these events:
1. On March 3, the board of directors declared a property dividend of 280,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $814,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15.
2. 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.
3. On July 5, a 3% common stock dividend was declared and distributed. The market value of the common stock was $12 per share.
4. On December 1, the board of directors declared the 8.5% cash dividend on the 96,000 preferred shares, payable on December 28 to shareholders of record December 20.
5. 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.
Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Incorporated at December 31, 2024. Net income for the year was $860,000

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