Carlyon Company listed the following equity items on December 31, 2012: During 2
ID: 2757179 • Letter: C
Question
Carlyon Company listed the following equity items on December 31, 2012:
During 2013, the following transactions occurred:
Dec 3 Answer Required Debit Credit
Common stock to Be distributed xxxxxx
Common stock, $10 par xxxxxx
Dec 28 Answer Required Debit Credit
Retained Earnings xxxxxx
Dividends Payable Preferred xxxxxx
Dividends Payable Common xxxxxx
Explanation / Answer
Comon stock to be distributed = Market price * Stock dividend percentage * number of shares outstanding = 22 * 2% * 400000/10 = 22 * 2/100 * 40000 = 22 * 800 = 17600 Dec 3 journal entry common Stock to be Distributed Dr 17600 Common stock . $ 10 par Cr 8000 Additional paid in capital common stock Cr 9600 ( To record issuance of stock dividend) Common stock at par = Par value * Stock dividend percentage * number of shares outstanding = 10 * 2/100 * 40000 = 8000 Dec 28. journal entry Retained Earnings Dr 52000 Dividends payable Preferred Cr 4000 (4 *100000/100) Dividends payable Common Cr 48000 (1.20 * 400000/10) ( To record declaration of semi annual cash dividend)