The stockholders' equity of Palepu Company at December 31, 2021, appears below. Common stock, $10 par value, 300,000 shares authorized; Shares issued and outstanding (1) Paid-in capital in excess of par value Retained earnings (1) 120,000 shares at $10 par value. $1,200,000 720,000 450,000 During 2022, the following transactions occurred: May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. Using the financial statement effects template, illustrate the effects of these transactions.
The stockholders' equity of Palepu Company at December 31, 2021, appears below. Common stock, $10 par value, 300,000 shares authorized; Shares issued and outstanding (1) Paid-in capital in excess of par value Retained earnings (1) 120,000 shares at $10 par value. $1,200,000 720,000 450,000 During 2022, the following transactions occurred: May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. Using the financial statement effects template, illustrate the effects of these transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Identifying and Analyzing Financial Statement Effects of Dividends (FSET)
The stockholders' equity of Palepu Company at December 31, 2021, appears below.
Common stock, $10 par value, 300,000 shares authorized;
Shares issued and outstanding (1)
Paid-in capital in excess of par value
Retained earnings
(1) 120,000 shares at $10 par value.
During 2022, the following transactions occurred:
May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share.
Dec. 31 Declared and paid a cash dividend of 75 cents per share.
Using the financial statement effects template, illustrate the effects of these transactions.
$1,200,000
720,000
450,000
NOTE: Use negative signs with your answers, when appropriate.
NOTE: Select "N/A" as your answer if a part of the accounting equation is not affected.
Transaction
Declared and issued stock dividend.
Declared and paid cash dividend.
Cash
Asset
0
♦
0
♦
Balance Sheet
Noncash
Assets - Liabilities +
Contributed
Capital
Common stock
0
0
+
0
+
+
Earned
Capital
0
+
0
+
Revenue -
Income Statement
Expenses
0
+
0
Net
Income
0
0
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