During 2004, Road Runner Corporation engaged in the following selected Jan. 1 Is
ID: 2482869 • Letter: D
Question
During 2004, Road Runner Corporation engaged in the following selected Jan. 1 Issued 15,000 shares of $1 per value common stock at $18 per share. June 15 Reacquired 1,000 shares of common stock sold on Jan. 1 for $19 per share. Aug. 10 Sold 600 shares of its treasury stock purchased on June 15 for $20 per share. Sept. 30 The board of directors declares and distributes a 10% common stock dividend. The selling price of the common stock is $210 per share. Nov. 30 The board of directors declares a cash dividend of $.55 per share payable to December 15. Dec. 15 Paid the cash dividends on November 30. Record journal entries for the above transactions.Explanation / Answer
Road Runner Corporation
Journal
Could not read from the post the transaction as of November 30 very clearly. Assumed that the cash dividends are $ 0.55 per share and recorded the transaction accordingly for 14,600 shares of common stock outstanding. If however, the dividends are $ 55 per share, total cash dividends would be 16,060 x $ 55 = $ 883,300
Date Account Titles Debit Credit 2004 $ $ Jan 1 Cash 270,000 Common stock 15,000 Additional paid-in capital- Common stock 255,000 June 15 Treasury stock 19,000 Cash 19,000 August 10 Cash 12,000 Treasury stock 11,400 Additional paid-in capital-Treasury stock 600 September 30 Retained earnings 30,660 Stock dividend distributable 1,460 Additional paid-in capital - Common Stock 29,200 Stock dividend distributable 1,460 Common stock 1,460 November 30 Retained earnings 8,833 Cash dividends payable 8,833 December 15 Cash dividends payable 8,833 Cash 8,833