Chapter 11, Problem 11.2AP

(a)

To determine

Stockholders’ equity: It refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

Cash dividends: The amount of cash provided by a corporation out of its distributable profits to its shareholders as a return for the amount invested by them is referred as cash dividends.

To Journalize: the issuance of stock and payment of cash dividends for Corporation M.

(b)

To determine

To post: the journal entries into stockholders’ equity accounts.

(c)

To determine

To Prepare: the stockholders’ equity section of balance sheet for Corporation M as of December 31, 2014.

(d)

To determine

To Calculate: the payout ratio for Corporation M.