Question

The following data were taken from the balance sheet accounts of Culver Corporation on December 31,...

The following data were taken from the balance sheet accounts of Culver Corporation on December 31, 2016.
Current Assets $575000
Debt Investments. 567000
Commom Stock (par value $10) 535000
Paid in Capital in excess of par 139000
Retained Earnings 802000

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 $39.
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 $101000 and a fair value of $134000.

Homework Answers

Answer #1
S. No. Account Tittle & Explanation Debit Credit
a. Retained Earnings( 53500*5%*39) $104,325
Common Stock Dividend Distributable (53500*5%*10) $26,750
Paid-in Capital in Excess of Par - Common Stock (bf) $77,575
TO Record Dividend Declared
Common Stock Dividend Distributable $26,750
Common Stock $26,750
TO Record Issuance of Stock
b. No entry
c. Debt Investments (134000-101000) $33,000
Unrealized Holding Gain or Loss - Income $33,000
Retained Earnings $134,000
Property Dividends Payable $134,000
Property Dividends Payable $134,000
Debt Investments $134,000
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