ACCOUNTING 1310-The equity sections from Atticus Group’s
The equity sections from Atticus Group’s 2013 and 2014 year-end balance sheets follow.
Stockholders’ Equity (December 31, 2013)
Common stock—$4 par value,100,000 shares authorized, 40,000 shares issued and outstanding$160,000
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Access Free Writing ToolsPaid-in capital in excess of par value, common stock 120,000
Retained earnings 320,000
Total stockholders’ equity$600,000
Stockholders’ Equity (December 31, 2014)
Common stock—$4 par value, 100,000 shares authorized, 47,400 shares issued, 3,000 shares in treasury$189,600
Paid-in capital in excess of par value, common stock 179,200
Retained earnings ($30,000 restricted by treasury stock) 400,000 768,800 Less cost of treasury stock (30,000)
Total stockholders’ equity$ 738,800
The following transactions and events affected its equity during year 2014.
- Jan. 5 Declared a $0.50 per share cash dividend, date of record January 10.
- Mar. 20 Purchased treasury stock for cash.
- Apr. 5 Declared a $0.50 per share cash dividend, date of record April 10.
- July. 5 Declared a $0.50 per share cash dividend, date of record July 10.
- July. 31 Declared a 20% stock dividend when the stock’s market value is $12 per share.
- Aug. 14 Issued the stock dividend that was declared on July 31.
- Oct. 5 Declared a $0.50 per share cash dividend, date of record October 10.
How do you figure out common shares?
The equity sections from Atticus Group’s 2013 and 2014 year-end balance sheets follow. Stockholders’ Equity (December 31, 2013) Common stock, $4 par value, 100,000 shares authorized,
40,000 shares issued and outstanding$160,000 Paid-in capital in excess of par value, common stock 120,000 Retained earnings 320,000 Total stockholders’ equity$600,000 Stockholders’ Equity (December 31, 2014) Common stock $4 par value, 100,000 shares
authorized, 47,400 shares issued, 3,000 shares in treasury$ 189,600 Paid-in capital in excess of par value, common stock 179,200 Retained earnings ($30,000 restricted by treasury stock) 400,000 768,800 Less cost of treasury stock (30,000) Total stockholders’ equity$ 738,800
The following transactions and events affected its equity during year 2014.
- Jan. 5 Declared a $0.50 per share cash dividend, date of record January 10.
- Mar. 20 Purchased treasury stock for cash.
- Apr. 5 Declared a $0.50 per share cash dividend, date of record April 10.
- July. 5 Declared a $0.50 per share cash dividend, date of record July 10.
- July. 31 Declared a 20% stock dividend when the stock’s market value is $12 per share.
- Aug.14 Issued the stock dividend that was declared on July 31.
- Oct. 5 Declared a $0.50 per share cash dividend, date of record October 10.
How do you figure out common shares?
Answer and step by step explanation
Common dividend declared=44,400*0.5=22,200
Opening shares | 40,000 |
Treasury stock purchased | (3000) |
37,000 | |
Stock dividend@20% | 7400 |
No of common shares outstanding | 44,400 |
Cash dividend per share |
Journal entries
Date | Particulars | Debit | Credit |
5/01 | Common cash dividend(40,000*0.5) | 20,000 | |
Dividends payable | 20,000 | ||
(To record cash dividend declared $0.5/share payable on 10/01) | |||
10/01 | Cash dividend payable | 20,000 | |
Cash | 20,000 | ||
(Being dividend paid) | |||
20/3 | Treasury stock | 30,000 | |
Cash | 30,000 | ||
(To record purchase of treasury stock for cash) | |||
5/04 | Common cash dividend (40,000-3000)*0.5 | 18,500 | |
Dividends payable | 18,500 | ||
(To record 0.5/share cash dividend payable on 10/4) | |||
10/04 | Cash dividend payable | 18,500 | |
Cash | 18,500 | ||
(Being cash dividend paid) | |||
5/07 | Common cash dividend | 18,500 | |
Dividends payable | 18,500 | ||
( to record 0.5/share cash dividend declared payable on 10/07) | |||
10/07 | Cash dividend payable | 18,500 | |
Cash | 18,500 | ||
(Being dividend paid) | |||
31/07 | Common stock dividend(40,000-3000)*20%*12 | 88,800 | |
Common stock dividend distributable(40,000-3000)*20%*4 | 29,600 | ||
Paid in capital in excess of par value-Common stock | 59,200 | ||
(To record dividend declared@20% when MV is $12/share) | |||
14/08 | Common stock dividend distributable | 29,600 | |
Common stock | 29,600 | ||
5/10 | Common cash dividend | 22,200 | |
Dividends payable | 22,200 | ||
(Declared a 0.5/share cash dividend) | |||
10/10 | Cash dividend payable | 22,200 | |
Cash | 22,200 | ||
31/12 | Retained earnings | 168,000 | |
Common stock dividend | 88,800 | ||
Common cash dividend | 79,200 | ||
31/12 | Income summary | 248,000 | |
Retained earnings(400,000-320,000+79,200+88,800) | 248,000 | ||
(close income summary to retained earnings) | |||
Retained Earnings account
Debit | Credit | ||
31/12 | 79,200 | Open bal | 320,000 |
31/12 | 88,800 | 31/12 | 248,000 |
Bal(Given in question) | 400,000 |
Paid in capital in excess of par
Debit | Credit | ||
OPn bal | 120,000 | ||
31/07 | 59200 | ||
Bal | 179,200 |
Common stock
Debit | Credit | ||
OB | 160,000 | ||
14/08 | 29,600 | ||
Bal | 189,600 |
Answer;
Jan-05 40000
Apr-05 44400
Jul-05 44400
Jul-31 44400
Aug-14 44400
Oct-05 44400
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