Instructions Selected transactions completed by ATV Discount Corporation during
ID: 2542863 • Letter: I
Question
Instructions Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows: Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,275,000 common shares outstanding. Purchased 41,300 shares of the corporation's own common stock at $29, recording the stock at cost. Declared semiannual dividends of $0.75 on 70,400 shares of preferred stock and $0.11 on the common stock to stockholders of record on May 15, payable on June 15 Jan. 5. Mar. 10. Apr. 30. June 15. Paid the cash dividends Aug. 20. Sold 31,900 shares of treasury stock at $33, receiving cash. Oct. 15 Declared semiannual dividends of $0.75 on the preferred stock and $0.11 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $38. The dividend date of record is November 15 payable on December 19. Paid the cash dividends and issued the certificates for the common stock dividend Dec. 19. Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.Explanation / Answer
Answer:
Date
Description
Debit $
Credit $
5-Jan
No entry Required
10-Mar
Treasury stock
1197700
Cash
1197700
(41300*29)
30-Apr
Cash dividend
188507
Dividends payable
188507
(preferred shares = 0.75*70400)
(Common shares=0.11*(1275000-41300))
(52800+132707)
15-Jun
Dividends payable
188507
cash
188507
20-Aug
Cash (31900*33)
1052700
Treasury stock (31900*29)
925100
paid in capital from sale of treasury stock
(31900*4)
127600
15-Oct
Cash dividend
Dividends payable
1404816
(preferred shares = 0.75*70400)
1404816
(Common shares=0.11*(12337000+31900))
(52800+139216)
15-Oct
Stock dividends (25312*38)
961856
Stock dividends distributable
961856
paid in capital in excess of par-CS
(1265600*2%)= 25312 shares
19-Dec
Dividends payable
1404816
cash
1404816
19-Dec
Stock dividend distributable
961856
Common Stock
961856
Date
Description
Debit $
Credit $
5-Jan
No entry Required
10-Mar
Treasury stock
1197700
Cash
1197700
(41300*29)
30-Apr
Cash dividend
188507
Dividends payable
188507
(preferred shares = 0.75*70400)
(Common shares=0.11*(1275000-41300))
(52800+132707)
15-Jun
Dividends payable
188507
cash
188507
20-Aug
Cash (31900*33)
1052700
Treasury stock (31900*29)
925100
paid in capital from sale of treasury stock
(31900*4)
127600
15-Oct
Cash dividend
Dividends payable
1404816
(preferred shares = 0.75*70400)
1404816
(Common shares=0.11*(12337000+31900))
(52800+139216)
15-Oct
Stock dividends (25312*38)
961856
Stock dividends distributable
961856
paid in capital in excess of par-CS
(1265600*2%)= 25312 shares
19-Dec
Dividends payable
1404816
cash
1404816
19-Dec
Stock dividend distributable
961856
Common Stock
961856