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Accounting Principles Homework Problems Chapter 14 1. On January 1, 2020, Smith Corporation had the following...

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Accounting Principles Homework Problems Chapter 14 1. On January 1, 2020, Smith Corporation had the following balances in the

Accounting Principles Homework Problems Chapter 14 1. On January 1, 2020, Smith Corporation had the following balances in the balances in its' stockholders' equity accounts. Common Stock ($10 par value, 120,000 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $1,200,000 200,000 600,000 The following transactions occurred during the year. Jan. 1 Declared a $1 cash dividend per share to stockholders of record on January 15, payable February 1. Feb. 1 Paid the dividend declared in January. Mar. 1 Announced a 2-for-1 stock split. Prior to the split, the market price per share was $36. June 1 Declared a 10% stock dividend to stockholders of record on June 15, distributable June 30. On June 1 the market price of the stock was $13 per share. 30 Issued the shares for the stock dividend. Dec. 1 Declared a $.50 per share dividend to stockholders of record on December 15, payable January 10, 2016. 31 Determined that net income for the year was $350,000. Instructions a. Journalize the above transactions. b. Journalize the closing entries for net income and dividends. C. Enter the beginning balances in the stockholders' equity accounts and post the above journal entries. (You will need to open additional stockholders' equity accounts as needed.) d. Prepare the stockholders' equity section of the balance sheet as of December 31.

Answers

a & b)
Smith Corporation
Date General,Journal Debit Credit
01-Jan Cash $       1,20,000.00
    To Dividend Payable $        1,20,000.00
01-Feb Dividend Payable $       1,20,000.00
    To Cash $        1,20,000.00
01-Mar No Entry but increase Number of shares=(120000*2)=240000
01-Jul Stock Dividend(120000*2*10%*$13) $       3,12,000.00
    To Common Stock dividend distributable   $        2,40,000.00
    To Paid in capital excess of par $           72,000.00
(Being amount of Stock Dividend)
31-Jul Common Stock dividend distributable $       2,40,000.00
    To Common Stock $        2,40,000.00
01-Dec Cash Dividend (240000+24000)=(264000*.50) $       1,32,000.00
    To Dividend Payable $        1,32,000.00
31-Dec Income Summary $       3,50,000.00
    To Retained Earnings $        3,50,000.00
31-Dec Retained Earnings $       3,12,000.00
    To Stock Dividend $        3,12,000.00
31-Dec Retained Earnings $       2,52,000.00
      To Cash Dividend $        2,52,000.00
c )
Common Stock
Date Particular Debit Date Particular Credit
31-Dec Balance c/d $     14,40,000.00 01-Jan Balance $ 12,00,000.00
31-Jul Common Stock dividend distributable $     2,40,000.00
Total $     14,40,000.00 Total $ 14,40,000.00
Common Stock dividend Distributable
Date Particular Debit Date Particular Credit
31-Jul To Common Stock $       2,40,000.00 01-Jul Stock Dividend $     2,40,000.00
Total $       2,40,000.00 Total $     2,40,000.00
Paid in capital excess of par
Date Particular Debit Date Particular Credit
31-Dec To Balance C/d $       2,72,000.00 01-Jan Balance $     2,00,000.00
01-Jul Stock Dividend $        72,000.00
Total $       2,72,000.00 Total $     2,72,000.00
Retained Earnings
Date Particular Debit Date Particular Credit
01-Jan Balance $     6,00,000.00
31-Dec To Stock Dividend $       3,12,000.00 31-Dec Net Income $     3,50,000.00
31-Dec To Cash Dividend $       2,52,000.00
31-Dec Balance $       3,86,000.00
Total $       9,50,000.00 Total $     9,50,000.00
d) Smith Corporation
Stockholder's Equity
Common Stock(144000 shares @$10) $     14,40,000.00
Paid in Capital Excess of Par $       2,72,000.00
Retained Earnings $       3,86,000.00
Total Stockholder's Equity $     20,98,000.00
.

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