Day 7 (6)Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2021–2023. At December 31, 2020, the corporation’s accounts included: ($ in thousands)Common stock, 117 million shares at $1 par$117,000 Paid-in capital—excess of par 702,000 Retained earnings 960,000 November 1, 2021, the board of directors declared a cash dividend of $0.90 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.On March 1, 2022, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $3.3 million, but were purchased two years previously for $2.9 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.On July 12, 2022, the corporation declared and distributed a 6% common stock dividend (when the market value of the common stock was $16 per share). Cash was paid in lieu of fractional shares representing 20,000 equivalent whole shares.On November 1, 2022, the board of directors declared a cash dividend of $0.90 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.On January 15, 2023, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $17 per share.On November 1, 2023, the board of directors declared a cash dividend of $0.75 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.Required:1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.2. Prepare comparative statements of shareholders’ equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $415 million, $480 million, and $540 million for 2021, 2022, and 2023, respectively.

Shareholder's equity is the section in the balance sheet that shows the total equity available to…

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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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Day 7 (6)

Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2021–2023. At December 31, 2020, the corporation’s accounts included:

	($ in thousands)
Common stock, 117 million shares at $1 par	$	117,000
Paid-in capital—excess of par		702,000
Retained earnings		960,000

November 1, 2021, the board of directors declared a cash dividend of $0.90 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
On March 1, 2022, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $3.3 million, but were purchased two years previously for $2.9 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.
On July 12, 2022, the corporation declared and distributed a 6% common stock dividend (when the market value of the common stock was $16 per share). Cash was paid in lieu of fractional shares representing 20,000 equivalent whole shares.
On November 1, 2022, the board of directors declared a cash dividend of $0.90 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
On January 15, 2023, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $17 per share.
On November 1, 2023, the board of directors declared a cash dividend of $0.75 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.

Required:
1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
2. Prepare comparative statements of shareholders’ equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $415 million, $480 million, and $540 million for 2021, 2022, and 2023, respectively.

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