Problem 18-5 Shareholders\' equity transactions; statement of shareholders\' equ
ID: 2398802 • Letter: P
Question
Problem 18-5 Shareholders' equity transactions; statement of shareholders' equity [LO18-6, 18-7, 18-8] Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2016-2018. At December 31, 2015, the corporation's accounts included Common stock, 111 million shares at $1 par Paid-in capital-excess of par Retained earnings ($ in 000s) $111,000 666,000 900,000 a. November 1, 2016, the board of directors declared a cash dividend of $0.50 per share on its common shares, payable to shareholders of record November 15, to be paid December 1 b. On March 1, 2017, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $2.6 million, but were purchased two years previously for $2.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5 c. On July 12, 2017, the corporation declared and distributed a 6% common stock dividend (when the market value of the common stock was $18 per share). Cash was paid in lieu of fractional shares representing 660,000 equivalent whole shares. d. On November 1, 2017, the board of directors declared a cash dividend of $0.50 per share on its e. On January 15, 2018, the board of directors declared and distributed a 3-for-2 stock split effected in the f. On November 1, 2018, the board of directors declared a cash dividend of $0.35 per share on its common shares, payable to shareholders of record November 15, to be paid December 1 form of a 50% stock dividend when the market value of the common stock was $19 per share common shares, payable to shareholders of record November 15, to be paid December 1 Required 1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)Explanation / Answer
Journal Entries:
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Date Account Description Debit Credit 1-Nov-16 Dividend $ 55,500,000 Dividend payable $ 55,500,000 (Being Dividend Declared) 1-Dec-16 Dividend payable $ 55,500,000 Cash $ 55,500,000 (Being Dividend paid) 1-Mar-17 Investment in Bond $ 300,000 Gain on Bond $ 300,000 (Being Written up to Fair Value) 1-Mar-17 Retained Earnings $ 2,600,000 Property Dividend Payable $ 2,600,000 (Being Property Divided proposed) 13-Mar-17 Property Dividend Payable $ 2,600,000 Investment in Bond $ 2,600,000 (Being Property Dividend paid) 12-Jul-17 Retained Earnings $ 119,880,000 Common Stock Dividend Distributable $ 6,000,000 Paid in Capital $ 102,000,000 Cash $ 11,880,000 (Being Stock Dividend Proposed) 12-Jul-17 Common Stock Dividend Distributable $ 6,000,000 Common Stock $ 6,000,000 (Being Stock Dividend paid) 1-Nov-17 Dividend $ 58,500,000 Dividend payable $ 58,500,000 (Being Dividend Declared) 31-Dec-18 Dividend payable $ 58,500,000 Cash $ 58,500,000 (Being Dividend paid) 15-Jan-18 No Entry 1-Nov-18 Dividend $ 61,425,000 Dividend payable $ 61,425,000 (Being Dividend Declared) 1-Dec Dividend payable $ 61,425,000 Cash $ 61,425,000 (Dividend Paid)