On January 1, 2011, Argentina Corporation had the following stockholders’ equity accounts.
|
Common Stock ($20 par value, 75,000 shares issued and outstanding) |
$1,500,000 |
|
Paid in Capital in Excess of Par Value |
200,000 |
|
Retained Earnings |
600,000 |
During the year, the following transactions occurred.
Feb. 1 Declared a $1 cash dividend per share to stockholders of record on February 15, payable March 1.
Mar. 1 Paid the dividend declared in February.
Apr. 1 Announced a 2 for 1 stock split. Prior to the split, the market price per share was $36.
July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable
July 31. On July 1, the market price of the stock was $13 per share.
31 Issued the shares for the stock dividend.
Dec. 1 Declared a $0.50 per share dividend to stockholders of record on December 15, payable January 5, 2012.
31 Determined that net income for the year was $350,000.
Instructions
(a) Journalize the transactions and the closing entries for net income and dividends.
(b) Enter the beginning balances, and post the entries to the stockholders’ equity accounts. (Note: Open additional stockholders’ equity accounts as needed.)
(c) Prepare a stockholders’ equity section at December 31.