Question

On January 1, Novak Corp. had 62,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. Issued 13,950 additional shares of common stock for $12 per share June 15 Declared a cash dividend of $1.60 per share to stockholders of record on June 30. July 10 Paid the $1.60 cash dividend. Dec. 1 Issued 6,200 additional shares of common stock for $11 per share. Dec. 15 Declared a cash dividend on outstanding shares of $1.70 per share to stockholders of record on December 31.
Prepare the entries, if any, on each of the three dates that involved dividends. (Record journal entries in the order presented in the problem.

Answer 1

Answer:

Retained Earnings 167,400 debit

     common stock       55,800 credit

     addtional paid-in     111,600 credit

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Dividends     121,520 debit

      Div Payable           121,520 credit

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Div Payable   121,520 debit

           Cash      121,520 credit

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Retained Earnings   68,200 debit

     common stock       24,800 credit

     addtional paid-in     43,400 credit

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Div Payable   139,655 debit

           Cash      139,655 credit

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Explanation:

13,950 shares x $12 = 167,400

13,950 shares x $ 4 =   55,800

additional                     111,600

cash dividedns

62,000 + 13,950 = 75,950 shares

75,950 shares x $ 1.60 = $121,520

6,200 shares x $11 = 68,200

6,200 shares x $ 4 = 24,800

additional                   43,400

cash dividends #2

75,950 + 6,200 = 82,150 shares

82,150 x $ 1.70 = 139,655