Could not find the solutions in the solution tab. II. Bennett Corporation report
ID: 2423815 • Letter: C
Question
Could not find the solutions in the solution tab. II. Bennett Corporation reported the following Stoc December 31, 2xxx epred the following Stockholders' Equity items on Preferred stock, 5%, cumulative $100 par, 00 shares authorized, 1.000 shares issued $100,000 53,200 Paid-in-capital in excess of par-preferred Common stock, $50 par, 10,000 shares authorized, 5,000 shares issued Paid-in-capital in excess of par-commorn Retained earmings 250,000 300,000 455,300 Required: Consider each of the following cases INDEPENDENTLY ) How many shares of common stock would be outstanding if Bennett Corporation declares a 4-for-1 stock split? Prepare the journal entry if Bennett Corporation distributed a 15% stock dividend on the common stock when the market price of the common stock was $130 per share. Prepare the journal entry if Bennett Corporation distributed a 45% stock dividend on the common stock when the market price of the common stock was $130 per share.Explanation / Answer
II) Required
a) Stock Split 4 for 1 shares
= Shares out standing X 4 = 1,000 X 4 = 4,000 shares
b) Stock Dividend 15%
= 1,000 X 15% = 150 shares
Retained earnings Dr 19,500 ( 150 X 130)
Common stock Cr 15,000 ( 150 X 100)
Paid in capital excess par value Cr 4,500 (150 X 30)
c) stock Dividend 45%
= 1,000 X 15% = 450 shares
Retained earnings Dr 58,500 ( 450 X 130)
Common stock Cr 45,000 ( 450 X 100)
Paid in capital excess par value Cr 13,500 (450 X 30)
IV) Journal entries
Jan 10
Treasury Stock Dr 150,000 ( 5,000 x 30)
Cash Cr 150,000
Jan 20
Cash Dr $ 99,000 ( 3000 X 33)
Treasury Stock Cr 90,000 ( 3000 X 30)
Paid inexcess par value Cr 9,000 (3000 X 3)
Jan 30
Cash Dr 44,000 ( 2000 X 22)
Paid in excess par value Dr 16,000 ( 2000 X 8)
Treasury Stock Cr 60,000 (2000 X 30)
3rd Picture) Required
Particulars Amount Dividend Declared 120,000 Less Used for arrears 37,500 Less preference shares (15,000 X 50 X 10%) 75,000 Dividend available for Common Stock 7,500