Problem 11-4A (Part Level Submission) (a) Date Account Titles and Explanation De
ID: 2520008 • Letter: P
Question
Problem 11-4A (Part Level Submission)
(a)
Date
Account Titles and Explanation
Debit
Credit
(To close net income)
(To close stock dividends)
(To close cash dividends)
Problem 11-4A (Part Level Submission)
On January 1, 2017, Geffrey Corporation had the following stockholders’ equity accounts.Common Stock ($26 par value, 58,000 shares issued and outstanding) $1,508,000 Paid-in Capital in Excess of Par—Common Stock 199,000 Retained Earnings 553,000
During the year, the following transactions occurred.
Feb. 1 Declared a $2 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 $37. 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 $15 per share. 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. 31 Determined that net income for the year was $396,500.
Explanation / Answer
Date Account Titles and Explanation Debit Credit 15-Feb Dividend 116,000.00 To Proposed Dividend 116,000.00 (58000*2) 1-Mar Proposed Dividend 116,000.00 To Bank 116,000.00 1-Apr Common Stock ( $ 26 Par Value ) 1,508,000.00 Common Stock ( $ 13 Par Value ) 1,508,000.00 15-Jul Retained Earnings 150,800.00 To Proposed Stock Dividend 150,800.00 (58000*2*13*10%) 31-Jul Proposed Stock Dividend 150,800.00 To Common Stock 150,800.00 1-Dec Dividend 51,040.00 To Proposed Dividend 51,040.00 (58000*2+11600)*0.4 31-Dec Net income 396,500.00 To Retained earnings 396,500.00