Problem 11-4A On January 1, 2017, Geffrey Corporation had the following stockhol
ID: 2562504 • Letter: P
Question
Problem 11-4A On January 1, 2017, Geffrey Corporation had the following stockholders equity accounts. Common Stock ($26 par value, 52,500 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $1,365,000 191,000 579,000 During the year, the following transactions accurred Feb. 1 Mar. 1 Declared a $2 cash dividend per share to stockholders of record on February 15, payable March 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. Declared a 10% stock dividend to stockholders of record on July 15 distributable July 31, on July , the market price of the Issued the shares for the stock dividend. Declared a so.40 per share dividend to stockholders of record on December 15, payable January 5, 2018. Determined that net income for the year was $357,500. tock mass er nar. July 1 31 Dec. 1 31 Journalize the transactions and the closing entries for net income and dividends. (Credit account tities are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Record journal entries in the order presented in theExplanation / Answer
(a) Feb. 1 Retained Earnings (52,500 X $2)..................................... 105,000
Dividends Payable.................................................................. 105,000
Mar. 1 Dividends Payable............................................................. 105,000
Cash........................................................................................ 105,000
Apr. 1 Memo—two-for-one stock split
increases number of shares to
105,000 = (52,500 X 2) and reduces
par value to $13 per share.
July 1 Retained Earnings (10,500 X $15)..................................... 157,500
Common Stock Dividends
Distributable (10,500 X $13)............................................. 136,500
Paid-in Capital in Excess of
Par Value (10,500 X $2).................................................... 21,000
31 Common Stock Dividends
Distributable.................................................................... 136,500
Common Stock....................................................................... 136,500
Dec. 1 Retained Earnings (115,500 X $.40).................................... 46,200
Dividends Payable.................................................................. 46,200
31 Income Summary................................................................ 357,500
Retained Earnings................................................................. 357,500
(b)
Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Apr. 1
July 31
Balance
2 for 1 split—new
par $13
136,500
1,365,000
1,501,500
Common Stock Dividends Distributable
Date
Explanation
Ref.
Debit
Credit
Balance
July 1
31
136,500
136,500
136,500
0
Paid-in Capital in Excess of Par Value
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
July 1
Balance
21,000
191,000
212,000
Retained Earnings
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Feb. 1
July 1
Dec. 1
31
Balance
Cash dividend
Stock dividend
Cash dividend
Net income
105,000
157,500
46,200
357,500
579,000
474,000
316,500
270,300
627,800
(c) GEFFREY CORPORATION
Balance Sheet (Partial)
December 31, 2016
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, $13 par value, 115,500
shares issued and outstanding....................................... $1,501,500
Additional paid-in capital
In excess of par value......................................................... 212,000
Total paid-in capital................................................. 1,713,500
Retained earnings.................................................................................. 627,800
Total stockholders’ equity....................................... $2,341,300
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Apr. 1
July 31
Balance
2 for 1 split—new
par $13
136,500
1,365,000
1,501,500