On January 1, 2014, Chen Corporation had the following stockholders’ equity accounts.
|
Common Stock ($5 par value, 200,000 shares issued and outstanding) |
$1,000,000 |
|
Paid-in Capital in Excess of Par—Common Stock |
200,000 |
|
Retained Earnings |
840,000 |
During the year, the following transactions occurred.
|
15 |
Declared a $1 cash dividend per share to stockholders of record on January 31, payable February 15. |
|
|
15 |
Paid the dividend declared in January. |
|
|
15 |
Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15 On April 15, the market price of the stock was $15 per share. |
|
|
May |
15 |
Issued the shares for the stock dividend. |
|
July |
1 |
Announced a 2-for-1 stock split. The market price per share prior to the announcement was $17. (The new par value is $2.50.) |
|
1 |
Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2015. |
|
|
31 |
Determined that net income for the year was $250,000. |
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.