On January 1, 2017, Geffrey Corporation had the following stockholders’ equity a
ID: 2492335 • Letter: O
Question
On January 1, 2017, Geffrey Corporation had the following stockholders’ equity accounts. Common Stock ($22 par value, 60,500 shares issued and outstanding) $1,331,000 Paid-in Capital in Excess of Par—Common Stock 197,000 Retained Earnings 556,000 During the year, the following transactions occurred.
Feb. 1 Declared 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 2-for-1 stock split. Prior to the split, the market price per share was $39.
July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $14 per share.
July, 31 Issued the shares for the stock dividend.
Dec. 1 Declared a $0.40 per share dividend to stockholders of record on December 15, payable January 5, 2018.
Dec. 31 Determined that net income for the year was $354,000.
Journalize the transactions and the closing entries for net income and dividends.
Explanation / Answer
Date
Particulars
LF
Debit ($)
Credit ($)
Feb 01
Dividend Dr
To Dividend Payable
(Being Dividend Declared on Common stock of $ 1 each share)
60,500
60,500
Mar 01
Dividend Payable Dr
To Cash
(Being Dividend paid in Cash)
60,500
60,500
April 01
Retained Earning Dr
To Common Stock Distributable
To Paid in Capital in excess of Par value
(Being 10% Stock dividend declared to Stockholder and the market price is $ 14)
84,700
60,500
24,200
July 31
Common Stock Distributable Dr
To Common Stock
60,500
60,500
Dec 01
Dividend Dr
To Dividend Payable
(Being Dividend Declared on 66,550 Common stock (inclusive of New Common Stock which was issued as Dividend) $ 0.40 each share, payable on Jan 05, 2018)
26,620
26,620
Dec 31
Income Summary/ P &L A/c Dr
To Retained Earning
(Being Net income determined)
354,000
354,000
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Date
Particulars
LF
Debit ($)
Credit ($)
Feb 01
Dividend Dr
To Dividend Payable
(Being Dividend Declared on Common stock of $ 1 each share)
60,500
60,500
Mar 01
Dividend Payable Dr
To Cash
(Being Dividend paid in Cash)
60,500
60,500
April 01
Retained Earning Dr
To Common Stock Distributable
To Paid in Capital in excess of Par value
(Being 10% Stock dividend declared to Stockholder and the market price is $ 14)
84,700
60,500
24,200
July 31
Common Stock Distributable Dr
To Common Stock
60,500
60,500
Dec 01
Dividend Dr
To Dividend Payable
(Being Dividend Declared on 66,550 Common stock (inclusive of New Common Stock which was issued as Dividend) $ 0.40 each share, payable on Jan 05, 2018)
26,620
26,620
Dec 31
Income Summary/ P &L A/c Dr
To Retained Earning
(Being Net income determined)
354,000
354,000