Problem 11-8A Warning Don\'t show me this message again for the assignment Ok Ca
ID: 2492938 • Letter: P
Question
Problem 11-8A
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Date
Account Titles and Explanation
Debit
Credit
(To close net income)
(To close stock dividends)
(To close cash dividends)
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Common Stock
Retained Earnings
Paid-in Capital in Excess of Par Value
Cash Dividends
Common Stock Dividends Distributable
Stock Dividends
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EVERETT CORPORATION
Partial Balance Sheet
December 31, 2014
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Problem 11-8A
On January 1, 2014, Everett Corporation had these stockholders’ equity accounts.Common Stock ($10 par value, 75,200 shares issued and outstanding) $752,000 Paid-in Capital in Excess of Par Value 507,400 Retained Earnings 671,600
During the year, the following transactions occurred.
Jan. 15 Declared a $0.70 cash dividend per share to stockholders of record on January 31, payable February 15. Feb. 15 Paid the dividend declared in January. Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share. May 15 Issued the shares for the stock dividend. Dec. 1 Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2015. Dec. 31 Determined that net income for the year was $352,400.
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Explanation / Answer
Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. Jan-15 Cash Dividends Dr. 52640 To Divaidend Payable - 75200 Shars X $0.70 52640 Feb-15 Dividend Payable Dr. 52640 To Cash 52640 Apr-15 Stock Dividend Dr. 112800 To Stock Dividend Distributable 75200 To Paid in Capital in excess of Par 37600 No. of shares issued as Stock Dividend = 75200 shares X 10% = 7520 shares Stock Dividend = 7520 Shares X $15 = $112800 Stock Dividend Distributable = 7520 Shares X $10 = $75200 Paid in Capital in excess of par = 7520 shares x $5 = 37600 May-15 Stock Dividend Distributable Dr. 75200 To Common Stock 75200 Dec-01 Cash Dividends Dr. 49632 To Dividend Payable 49632 Dividend Payable - (75200 + 7520) X $0.60 = $49632 Dec-31 Income Summary Dr. 352400 To Retained Earnings 352400 Dec-31 Retained Earnings Dr. 112800 To Stock Dividends 112800 Dec-31 Retained Earnings Dr. 102272 To Cash Dividends 102272 As per Chegg Guidelines, You can ask only one question at a time having four subparts. For other parts or Questions please ask it again.