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Jackson Enterprises has the following capital (equity) accounts: Common stock ($1 par; 150,000 shares outstanding) $...

Jackson Enterprises has the following capital (equity) accounts:

Common stock ($1 par; 150,000 shares outstanding) $ 150,000
Additional paid-in capital 100,000
Retained earnings 275,000

The board of directors has declared a 15 percent stock dividend on January 1 and a $0.20 cash dividend on March 1. What changes occur in the capital accounts after each transaction if the price of the stock is $5? Round the number of shares outstanding to the nearest whole number and the other answers to the nearest dollar.

The impact of the 15 percent stock dividend:

Common stock ($   par;  shares outstanding) $   
Additional paid-in capital $   
Retained earnings $   

The impact of the $0.20 a share cash dividend:

Common stock ($   par;  shares outstanding) $   
Additional paid-in capital $   
Retained earnings $   
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Answer #1

Stock dividend issued = 150,000 *15% = 22500

The impact of the 15 percent stock dividend:

Common stock, $1 par ,172500 shares outstanding) 172500
Additional paid in capital
[100,000 + (5-1) * 22500		 190000
Retained earnings
[275,000 - (22500*5)]		 162500

The impact of the $0.20 a share cash dividend:

Common stock, $1 par ,172500 shares outstanding) 172500
Additional paid in capital
[100,000 + (5-1) * 22500		 190000
Retained earnings
[162500 - (172500*0.2)]		 128000
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