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Date
Debit
Credit
Jan
Issued 10,000 shares $1 par common stock for $10 per share
The date of record is January 15 and the date of payment is Jauary 20.
Paid the cash dividend
March
April
Declared and distributed a 10% stock dividend on the common stock when the market value was $12 per share
June
Purchased 1,000 shares of common stock for the treasury for $13 per share
Dec
Sold 500 treasury shares for $15 per share
Common Stock
Pearson Wood Supplies
Additional Paid in Capital
Retained Earnings
Treasury Stock
Total
Record the transactions in the journal.
Requirements:
Prepare the statement of shareholders’ equity for 20XX.
Journal
Accounts
Post Ref.
For the year ended 20XX
Module 6 Solution:
Statement of Shareholders’ Equity
Declared a 2-for-1 stock split by calling in the 40,000 shares of $1 par common stock and issuing new stock in its place
Preferred stock
Pearson began 20XX with 30,000 $1 common shares issued and outstanding. Paid in capital in excess of par was $25,000 and retained earnings were $175,000. Net income for 20XXwas $22,000. Pearson Wood Supplies completed the following transactions for 20XX.
Declared a cash dividend on 5,000 shares of 5% $4 par preferred stock and a $.20 per share dividend on 40,000 shares of common stock outstanding.
Cash (10,000 x $10)
Common Stock (10,000 x $1 par)
Paid in Capital in Excess of Par-Common
Dividends (Retained Earnings)
Dividends Payable
Dividends Payable
Cash
Stock DivideDistributable
Stock dividends payable
Jun
Paid in excess
Cash 7500 – 500 sold market price 15.00 each
Treasury stock 6500 – 500 sold market price 13.00 each
Issuance of Stock
Net Income
Cash Dividends
Stock Dividends
Purchase of treasury stock
Sale of treasury stock
Balance, December 31, 20×2
Balance, December 31, 20×1