Included in the December 31, 2012, Jacobi Company balance sheet was the followin
ID: 2459235 • Letter: I
Question
Included in the December 31, 2012, Jacobi Company balance sheet was the following shareholders' equity section:
The company engaged in the following stock transactions during 2013:
MAY 14 JE ANSWER
DEBIT CREDIT
RETAINED EARNINGS XXXXX
COMMON STOCK TO BE DISTRIBUTED XXXXX
ADD'L PAID IN CAPITAL FROM STOCK DIVIDEND XXXXX
Explanation / Answer
Journal Entry of May 14: Declared 10% stock dividend on the outstanding common stock, currently selling price $25 per common share.
Number of Common Stock outstanding on May 14: 30000 + 4000= 34000
DEBIT CREDIT
RETAINED EARNINGS 934000*25) $850,000
COMMON STOCK TO BE DISTRIBUTED (34000*5) 170,000
ADD'L PAID IN CAPITAL FROM STOCK DIVIDEND (34000*20) 680,000