Question

1- The following data were taken from the balance sheet accounts of Pharoah Corporation on December...

1- The following data were taken from the balance sheet accounts of Pharoah Corporation on December 31, 2016. Current assets $520,000 Debt investments 567,000 Common stock (par value $10) 507,000 Paid-in capital in excess of par 135,000 Retained earnings 797,000 Prepare the required journal entries for the following unrelated items

(a) A 5% stock dividend is (1) declared and (2) distributed at a time when the market price per share is $45.
(b) The par value of the common stock is reduced to $2 with a 5-for-1 stock split.
(c) A dividend is declared January 5, 2017, and paid January 25, 2017, in bonds held as an investment. The bonds have a book value of $99,000 and a fair value of $126,000.

Homework Answers

Answer #1
a
Retained Earnings 114075 =50700*5%*45
         Common Stock Dividend Distributable 25350 =50700*5%*10
         Paid-in Capital in Excess of Par - Common Stock 88725
Common Stock Dividend Distributable 25350
       Common Stock 25350
b
No entry
c
Debt Investments 27000 =126000-99000
       Unrealized Holding Gain or Loss - Income 27000
Retained Earnings 126000
        Property Dividends Payable 126000
Property Dividends Payable 126000
       Debt Investments 126000
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