Description
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Explanation & Answer
Attached.
1st year
2nd year
3rd year
4th year
Preferred stock (Dividend per share)
2.14
2.98
4.48
3.2
Common stock (Dividend per share)
0
0
0.53
1.47
a)
Dr
Cr
Jan 14
Cash
4,675,000
Common stock
1,375,000
Paid-in capital excess of par(Common stock)
3,300,000
March 17
Cash
800,000
Preferred stock
500,000
Paid-in capital excess of par (Preferred stock)
300,000
b) Total paid in capital
=4675000+800000 =5,475,000
DR
CR
Jan 30
Cash
2,100,000
Common Stock
2,100,000
Jan 31
Legal fees
Common stock
8000
8000
Feb 21
Dr
Land
78,000
Buildings
427,000
Equipment
97,000
Cr
Common stock
430,000
Paid-in capital excess of par(Common stock)
172,000
Mar 2
Dr
Cr
Cash
1,725,000
Preferred stock
1,380,000
Paid-in capital excess of par (Preferred stock)
345,000
Dr
Cr
April 1
Cash dividends
78,200
Cash dividends payable
78,200
To record declaration of dividends
May 1
No Entry Required
June 3
Cash dividends payable
Cash
To record payment of dividends
78,200
78,200
Dr
Cr
April27
Treasury stock
303,600
Cash
303,600
July 13
Cash
233,600
Treasury stock
211,200
Paid-in capital from sale of treasury stock
22,400
Oct 8
Cash
88,200
Paid-in capital from sale of treasury stock
4,200
Treasury stock
92,400
b) = 211,200 – 4,200 = 207,000
c) Beaverhead Inc. may have purchased the treasury stock to provide shares for resale to employees,
reissue the shares as bonuses or to support the market price of the stock.
Stockholders’ Equity
Paid-in capital:
Common stock, $15 par
$184,500
Excess of issue price over par
$14,760
From sale of treasury stock
$199,260
$8,000
Total paid-in capital
$207,260
Retained earnings
$305,000
Total
512,260
Deduct treasury stock
$11,495
Total stockholders’ equity
$500,765
Retained Earnings Statement
For the Year Ended October 31, 2014
Retained earnings November 1, 2013
$371,900
Net income
$48,300
Less: dividends declared
$25,100
Increase in retained earnings
23,200
Retained earnings, October 31, 2014
$395,100
Feb 10
No entry
May 1
Dr
Cash dividends
19,940
Cash dividends payable
19,940
June 15
Cash dividend payable
Cr
19,940
Cash
19,940
Nov 1
Dr
Cash dividends
18,920
Cash Dividend payable
Stock dividends
Cr
18,920
95,880
Common stock dividend payab...