Answer:
Dividends 30,800 debit
Dividends payable 30,800 credit
--to record cash dividends declared--
Dividends payable 30,800 debit
Cash 30,800 credit
--to record payment of cash dividends--
Jun 10 no entry required the split do not change the total value of the preferred stock
August 15th
Retained earnings 450,000 debit
Common stock 450,000 credit
--to record stock dividends--
treasury stock 12,600 debit
cash 12,600 credit
--to record purchase of treasury stock--
cash 7,700 debit
treasury stock 6,300 credit
additional paid-in TS 1,400 credit
--to record sale of TS--
cash 3,000 debit
additional paid-in TS 500 debit
treasury stock 3,500 credit
--to record sale of TS--
Explanation:
Jan 16th cash dividends 950 shares x $100 par x 4% = $3,800
90,000 shares x 0.30 per share = 27,000
Total 27,000 + 3,800 = 30,800
July 30th:
value of the stock dividends:
90,000 shares x $10 x 50% = 450,000
<em>recorded when distributed.</em>
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Treasury stock: we record at cost. Then at sale date we compare with this cost and determinate wether we create an additional paid-in for the stock or if we should decrease retained earnings when sale at "loss"
purchase: 1,400 shares x $9 per share = 12,600
sale 700 x $11 = 7,700
cost 700 x $ 9 = 6,300
addtional paid in TS 1,400
second sale 500 x $ 6 = 3,000
cost 500 x $ 7 = 3,500
decrease in additional paid-in TS 500
