Question

On January 1, 2018, Walker Corporation had the following account balances: Common stock, $1 par, 250,000...

On January 1, 2018, Walker Corporation had the following account balances:

Common stock, $1 par, 250,000 shares issues 250,000
Paid-in-capital - excess of par, common 500,000
Preferred stock, $100 par, 10,000 shares outstanding 1,000,000
Paid-in-capital - excess of par, preferred 100,000
Retained Earnings 2,000,000
Treasury stock, at cost, 5,000 shares 25,000

During 2018, the following transactions occurred relating to common stock:

1/15/18 - Declared a property dividend of 100,000 shares of Wagner Company (book value $10 per share; fair value $9 per share)
2/17/18 - Distributed the property dividend
4/10/18 - A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. The fair value of the stock was $4 on this date.
7/18/18 - Declared and distributed a 3% stock dividend on outstanding common stock; fair value per share, $5
12/1/18 - Declared a $0.50 cents per share cash dividend on the outstanding common shares
12/20/18 - Paid the cash dividend

Required: Prepare the required journal entries for the above transactions.

Business   Accounting   
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Answer #1

Prepare the required journal entries for the transactions.

Date

Description

Debit $

Credit $

15-Jan

Loss on investment [(100,000 - ($10 - $9)

100,000

Investment in Slowdown Co

100,000

Retained earnings (100,000 x $9)

900,000

Property dividend payable

900,000

17-Feb

Property dividend payable

900,000

Investment in Slowdown Co

900,000

10-Apr

Retained earnings [(250,000 – 5,000) x $1]

245000

Common stock

245000

18-Jul

Retained earnings [(3% x 490,000) x $5]

73500

Common stock [(3% x 490,000) x $1]

14700

Paid-in capital - excess of par

58800

1-Dec

Retained earnings (504,700 x $.50)

252,350

Cash dividends payable

252,350

20-Dec

Cash dividends payable

252,350

CASh

252,350
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