ACCOUNTING 1310-The equity sections from Atticus Group’s

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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.

July5 Declared a $0.50 per share cash dividend, date of record July 10.

July31 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.July5 Declared a $0.50 per share cash dividend, date of record July 10.July31 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

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Opening shares 40,000
Treasury stock purchased(3000)
 37,000
Stock [email protected]%7400
No of common shares outstanding 44,400
Cash dividend per share 

Journal entries 

DateParticulars Debit Credit 
5/01Common cash dividend(40,000*0.5)20,000 
 Dividends payable  20,000
 (To record cash dividend declared $0.5/share payable on 10/01)  
    
10/01Cash dividend payable 20,000 
 Cash  20,000
 (Being dividend paid)   
    
20/3Treasury stock30,000 
 Cash  30,000
 (To record purchase of treasury stock for cash)   
    
5/04Common cash dividend (40,000-3000)*0.518,500 
 Dividends payable  18,500
 (To record 0.5/share cash dividend payable on 10/4)  
    
10/04Cash dividend payable 18,500 
 Cash  18,500
 (Being cash dividend paid)   
    
5/07Common cash dividend 18,500 
 Dividends payable  18,500
 ( to record 0.5/share cash dividend declared payable on 10/07)  
    
10/07Cash dividend payable 18,500 
 Cash  18,500
 (Being dividend paid)   
    
    
31/07Common stock dividend(40,000-3000)*20%*1288,800 
 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 [email protected]% when MV is $12/share)  
    
14/08Common stock dividend distributable 29,600 
 Common stock  29,600
    
    
5/10Common cash dividend 22,200 
 Dividends payable  22,200
 (Declared a 0.5/share cash dividend)   
    
10/10Cash dividend payable 22,200 
 Cash 22,200
    
31/12Retained earnings 168,000 
 Common stock dividend  88,800
 Common cash dividend  79,200
    
31/12Income 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 
31/1279,200Open bal320,000
31/1288,80031/12248,000
    
  Bal(Given in question) 400,000

Paid in  capital in excess of par 

 Debit Credit
  OPn bal120,000
  31/0759200
    
  Bal179,200

Common stock 

 Debit Credit 
  OB160,000
  14/0829,600
    
  Bal189,600

Answer;

Jan-05 40000

Apr-05 44400

Jul-05 44400

Jul-31 44400

Aug-14 44400

Oct-05 44400

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