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lions [1.4K]
3 years ago
11

Mustang Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31, 2015, the company's board of di

rectors declares a 20 percent stock dividend. This stock dividend will be distributed on January 20, 2016 to the stockholders of record on January 15, 2016. The market price of the company's stock is $10 per share on December 31, 2015. Complete the necessary journal entry to record the distribution of the stock dividend by selecting the account names and dollar amounts from the drop-down menus.

Business
2 answers:
Nataly_w [17]3 years ago
8 0

Answer:

A stock dividend does not involve cash. By stock dividend even though the total stockholder equity remains the same, the stock dividend require to transfer the journal entry to transfer the amount from the retained earnings section of the balance sheet to the paid-up capital section of the balance sheet.

Explanation:

Please see attachment .

faust18 [17]3 years ago
3 0

Answer:

<u>The journal entry will be as follow:</u>

Dec 31th

Retained Earnings            200,000 debit

Stock Dividends Payable      200,000 credit

to record declared stock dividends

Jan 20th

Stock Dividends payable    200,000 debit

         Common Stock                                    40,000 credit

         Additional paid-in                               160,000 credit

Explanation:

The company will issue 20% stock

100,000 shares x 20% = 20,000 shares

The company cost for this 20,000 will be the market value

20,000 shares x $10 = 200,000

This will be compare with the face value of the shares to calculate the adidtional paid-in:

20,000 sahres x $2 face value = 40,000 common stock

200,000 market value - 40,000 face value = 160,000 additional paid-in

<u>The journal entry will be as follow:</u>

Dec 31th

We declare the dividends against retained earnings, from there we will take the funds to pay the dividends

Jan 20th

The dividends will be paid with common stock so we write-off the dividdends payable again the issued stock and their aditioanl paid-in.

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Answer:

1. Cost to retail ratio = Cost of goods available for sale/ Retail value of goods available for sale

- Cost of goods available for sale = $430000 + $920000 + $62550 = $1412550

- Retail Value of goods available for sale = Retail value of inventory + Net Markup - Net Markdown = $565000 + $1340000 + $61000 - $31000 = $1935000

Cost to retail ratio = Cost of goods available for sale/Retail value of goods available for sale = ($1412550/$1935000)*100 = 73%

Sales value at retail = $1265000

So, Cost Of goods Sold = Sales Value at retail*Cost to retail ratio = $1265000*73% = $923,450

2. Ending Inventory Retail Value = Retail value of goods available for sale-Sales value at retail = $1935000 - $1265000 = $670,000

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8 0
3 years ago
Financial statements that give effect to a subsequent event as though the event had occurred at the balance sheet date are known
mojhsa [17]

Answer:

The correct answer to the following question is Pro forma financial statements.

Explanation:

A subsequent event can be defined as an event which takes place after the reporting period, but before the financial statements of a company are issued.  And depending on what kind of event they are like additional information or new events, it will be decided whether these events should be disclosed in a company's financial statement or not.

If it is decided that the subsequent event should be disclosed in the company's financial statement then a pro forma financial statement would be made, in which nature and financial effect of the subsequent event should be disclosed.

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3 years ago
During its first year of operations, a company entered into the following transactions: Borrowed $5,000 from the bank by signing
fiasKO [112]

Answer:

The amount of total assets at the end of the year is $15,600

Explanation:

The computation of the total assets is shown below:

= Borrowed amount + issued stock to owners + purchase of supplies - paid to supplies

= $5,000 + $10,000 + $1,000 - $400

= $15,600

We considered all the items which are given in the question. The payment made to supplies should be deducted as it reduced the balance of cash So, the remaining items would be added

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3 years ago
the federal reserve: regulates the banking system. clears all checks. prints all currency. makes loans to individuals.
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The Federal reserve regulates the banking system. The American government's central bank and monetary authority is known as the Federal Reserve System.

  • A secure, adaptable, and stable monetary and financial system is provided by the Fed for the nation.
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  • Conducting national monetary policy, overseeing and regulating banks, preserving financial stability, and offering banking services are among the Fed's primary responsibilities.
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Learn more about Federal Reserve System, here

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6 0
1 year ago
The cost of goods for Mandy Manufacturing Company flow through an assembly and a finishing department before being transferred t
laila [671]

Answer:

Option (D) is correct.

Explanation:

Given that,

Beginning work in process = $4,000

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Cost transferred = $47,000

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Direct labor  = $46,000

Overhead  = $22,000

Cost incurred in finishing department:

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= $134,000

Cost of goods transferred to the Finished Goods Inventory account:

= Cost incurred in finishing - Ending work in process

= $134,000 - $6,000

= $128,000

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3 years ago
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