Problem 14-03A a-d (Part Level Submission) On January 1, 2020, Cullumber Corpora
ID: 2328243 • Letter: P
Question
Problem 14-03A a-d (Part Level Submission) On January 1, 2020, Cullumber Corporation had the following stockholders' equity accounts. Common Stock (no par value, 93,000 shares issued and outstanding) Retained Earnings During the year, the following transactions occurred. $1,395,000 480,000 Feb. 1 Dedared a $1 cash dividend per share to stockholders of record on February 15, payable March 1. Mar. 1 Paid the dividend declared in February. Apr. 1 Announced a 3-for-1 stock split. Prior to the split, the market price per share was $38. July 1 Dedared a 5% stock dividend to stockholders of record on July 15, distributable July 31, on July 1, the market price 31 Dec. 1 31 of the stock was $10 per share. Issued the shares for the stock dividend. Declared a $o.40 per share dividend to stockholders of record on December 15, payable January 5, 2021 Determined that net income for the year was $347,000.Explanation / Answer
Note: 1 CALCULATION OF THE CLOSING NUMBER OF SHARES OUTSTANDING AND TOTAL SHARE CAPITAL No. of Shares Par Value Total Value Common Stock Outstanding = 93,000 15 $ 13,95,000 Feb - 01, Declared Cash Dividend $ 1 per Shares $ - Apr- 01, Declared Stock Split 3 for 1 2,79,000 5 $ 13,95,000 (93,000 Shres X 3 ($ 15 /3) July -01, Declared 5% Stock Dividend = 13,950 5 $ 69,750 (279,000 Shares X5%) December - 1, Declared $ 0.40 Per share Stock Dividend = $ - 0 $ - Total Shares and value 2,92,950 5 $ 14,64,750.0 Note: 2 : CALCULATION OF THE ADDITTINAL PAID IN CAPITAL VALUE Addittional Paid in Capital : July -01, Declared 5% Stock Dividend = 13,950 Shares X $ 5 = $ 69,750.0 Note : 3 CALCULATION OF THE CLOSING BALANCE OF RETAINED EARNING: $ 4,80,000.0 Feb - 01, Declared Cash Dividend $ 1 per Shares $ -93,000.0 Balance $ 3,87,000.0 Apr- 01, Declared Stock Split 3 for 1 $ - July -01, Declared 5% Stock Dividend = (13,950 Shares X $ 10) $ -1,39,500.0 Balance $ 2,47,500.0 December - 1, Declared $ 0.40 Per share Stock Dividend = $ -1,17,180.0 (292, 500 Shares X $ 0.40) Balance $ 1,30,320.0 Add: Net income for the year = $ 3,47,000.0 Closing Balance of Retained Earning $ 4,77,320.0 STOCKHOLDER'S EQUITY Paid in Capital Common stock (292,950 Shares issued , par value $ 5) $ 14,64,750.0 Addittional paid in capital $ 69,750.0 Total Paid in Capital $ 15,34,500.0 Retained Earning $ 4,77,320.0 Total Paid in Capital and Retained Earning $ 20,11,820.0