Question

the equity account for kalimantan corp showed the following balances on dec31 2016 preferred shares 2$...

the equity account for kalimantan corp showed the following balances on dec31 2016
preferred shares 2$ non cumulative unlimited share authorized     0$
common share unlimited shares authorized 100000 shares issued and outstanding    640,000
retained earnings     864000
the company completed these transactions during 2017
jan 10 issued 20000 common shares at 9.60 cash per share
jan 15 the directors declared a 10% share dividend to jan 30 shareholders of record ,distributable on feb 15.

Homework Answers

Answer #1

Journal Entries :-

Date Particulars Debit($) Credit($)
Jan 10 Cash A/c Dr. ($9.60*20000) 192000
To Common Stock A/c ($6.4*20000) 128000
To Paid in Capital in Excess of Par (($9.6-$6.4)*20000) 64000
(To Record Common Stock Issued at $9.6)
Jan 30 Retained Earing A/c Dr. ((100000+20000)*10%)*$6.4 76800
To Common Stock Dividend Distributable A/c 76800
(To Record Common Stock Dividend Declared)
Feb 15 Common Stock Dividend Distributable A/c Dr. 76800
To Common Stock A/c 76800
(To Record Common Stock Dividend Distribution)

Note : In this Question, Market Price of Share are not given. i Assume Stock Dividend Distribute at Par.

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