Question

Patrick Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2014, the company has the following stock transactions.
Jan. 15 Issued 700,000 shares of stock at $7 per share.

Sept. 5 Purchased 20,000 shares of common stock for the treasury at $8 per share.

Dec. 6 Declared a $0.50 per share dividend to stockholders of record on December 20, payable January 3, 2015.

Journalize the transactions for Patrick Corporation.

Answer 1

Answer:

cash   4,900,000 debit

   common stock              700,000 credit

   additional paid-in        4,200,000 credit

   in excess of Par-value

treasury stock:   360,000 debit

      cash                      360,000 credit

dividends     340,000 debit

   dividends payable        340,000 credit

Explanation:

cash proceeds: 700,000  x 7 = 4,900,000

common stock: 700,000  x 1  =    700,000

additional paid-in:  (difference)           4,200,00

treasury stock: 20,000 x 18 = 360,000

outstanding shares: 700,000 - 20,000 = 680,000

cash dividends: 680,000 x 0.50 = 340,000