Senior Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Senior Life Co.: The stock outstanding when a corporation has issued only one class of stock.Common stock (410,000 shares authorized; 7,000 shares issued), $125 A dollar amount assigned to each share of stock.par, $875,000; Capital contributed to a corporation by the stockholders and others.Paid-In Capital in excess of par— common stock, $175,000; and Net income retained in a corporation that is reported as part of stockholders' equity.Retained earnings, $8,750,000. The board of directors declared a 1% stock dividend when the market price of the Shares of ownership of a corporation.stock was $165 a share. Senior Life Co. reported no income or loss for the current year.
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a1. Journalize the entry to record the declaration of the Distributions of a corporation's earnings to stockholders.dividend, capitalizing an amount equal to market value.
Stock Dividends
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Stock Dividends Distributable
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Paid-In Capital in Excess of Par-Common Stock
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a2. Journalize the entry to record the issuance of the stock certificates.
Stock Dividends Distributable
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Common Stock
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b. Determine the following amounts before the stock dividend was declared: (1) total paid-in capital, (2) total retained earnings, and (3) total The owners' equity in a corporation.stockholders' equity.
Total paid-in capital | $ |
Total retained earnings | $ |
Total stockholders' equity | $ |
c. Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.
Total paid-in capital | $ |
Total retained earnings | $ |
Total stockholders' equity | $ |
a1 | |||
Stock Dividends | 11550 | =7000*165*1% | |
Stock Dividends Distributable | 8750 | =7000*125*1% | |
Paid-In Capital in Excess of Par-Common Stock | 2800 | ||
a2 | |||
Stock Dividends Distributable | 8750 | ||
Common Stock | 8750 | ||
b | |||
Total paid-in capital | 1050000 | =875000+175000 | |
Total retained earnings | 8750000 | ||
Total stockholders' equity | 9800000 | ||
c | |||
Total paid-in capital | 1061550 | =1050000+11550 | |
Total retained earnings | 8738450 | =8750000-11550 | |
Total stockholders' equity | 9800000 |
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