The equity sections for Fairhaven Group at the beginning of the year (January 1) and end of the year (December 31) follow. Stockholders' Equity (January 1) Common stock-$10 par value, 130,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity Stockholders' Equity (December 31) Common stock-$10 par value, 130,000 shares authorized, 58,010 shares issued, 5,500 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings ($110,000 restricted by treasury stock) Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during the year. January 5 Declared a $1.20 per share cash dividend, payable on January 10. March 20 Purchased treasury stock for cash. April 5 Declared a $1.20 per share cash dividend, payable on April 10. July 5 Declared a $1.20 per share cash dividend, payable on July 10. July 31 Declared a 18 % stock dividend when the stock's market value was $22 per share. August 14 Issued the stock dividend that was declared on July 31. October 5 Declared a $1.20 per share cash dividend, date of record October 10. Requirement General Journal General Ledger Trial Balance Number of shares to be issued Amount to be capitalized per share Total amount to be capitalized Capitalization of retained earnings due to stock dividend: Number of shares outstanding on July 30 Percentage of stock dividend Calculate the amount of retained earnings to be capitalized as a result of the stock dividend. Dates: January 01 Cash Dividends < Cash Dividends Stock Dividend Stock Dividend > $ 500,000 75,000 410,000 $ 985,000 $ 580,100 171, 120 740,000 1,491,220 (110,000) $ 1,381,220 to: December 31 ▼
The equity sections for Fairhaven Group at the beginning of the year (January 1) and end of the year (December 31) follow. Stockholders' Equity (January 1) Common stock-$10 par value, 130,000 shares authorized, 50,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity Stockholders' Equity (December 31) Common stock-$10 par value, 130,000 shares authorized, 58,010 shares issued, 5,500 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings ($110,000 restricted by treasury stock) Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during the year. January 5 Declared a $1.20 per share cash dividend, payable on January 10. March 20 Purchased treasury stock for cash. April 5 Declared a $1.20 per share cash dividend, payable on April 10. July 5 Declared a $1.20 per share cash dividend, payable on July 10. July 31 Declared a 18 % stock dividend when the stock's market value was $22 per share. August 14 Issued the stock dividend that was declared on July 31. October 5 Declared a $1.20 per share cash dividend, date of record October 10. Requirement General Journal General Ledger Trial Balance Number of shares to be issued Amount to be capitalized per share Total amount to be capitalized Capitalization of retained earnings due to stock dividend: Number of shares outstanding on July 30 Percentage of stock dividend Calculate the amount of retained earnings to be capitalized as a result of the stock dividend. Dates: January 01 Cash Dividends < Cash Dividends Stock Dividend Stock Dividend > $ 500,000 75,000 410,000 $ 985,000 $ 580,100 171, 120 740,000 1,491,220 (110,000) $ 1,381,220 to: December 31 ▼
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:The equity sections for Fairhaven Group at the beginning of the year (January 1) and end of the year (December 31) follow.
Stockholders' Equity (January 1)
Common stock-$10 par value, 130,000 shares authorized, 50,000 shares issued and outstanding
Paid-in capital in excess of par value, common stock
Retained earnings
Total stockholders' equity
Stockholders' Equity (December 31)
Common stock-$10 par value, 130,000 shares authorized, 58,010 shares issued, 5,500 shares in treasury
Paid-in capital in excess of par value, common stock
Retained earnings ($110,000 restricted by treasury stock)
Less cost of treasury stock
Total stockholders' equity
The following transactions and events affected its equity during the year.
January 5 Declared a $1.20 per share cash dividend, payable on January 10.
March 20 Purchased treasury stock for cash.
April 5 Declared a $1.20 per share cash dividend,
payable on April 10.
July 5 Declared a $1.20 per share cash dividend, payable on July 10.
July 31 Declared a 18 % stock dividend when the stock's market value was $22 per share.
August 14 Issued the stock dividend that was declared on July 31.
October 5 Declared a $1.20 per share cash dividend, date of record October 10.
Requirement
General
Journal
General
Ledger
Trial Balance
Amount to be capitalized per share
Total amount to be capitalized
Capitalization of retained earnings due to stock dividend:
Number of shares outstanding on July 30
Percentage of stock dividend
Number of shares to be issued
Calculate the amount of retained earnings to be capitalized as a result of the stock dividend.
Dates: January 01
Cash
Dividends
< Cash Dividends
Stock Dividend
Stock Dividend >
$ 500,000
75,000
410,000
$ 985,000
to: December 31
$ 580,100
171,120
740,000
1,491,220
(110,000)
$ 1,381,220
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