ACC206 Strayer Advantages Of Cash And Stock Dividends Accounting Help

Brief Exercise 14-03

Bramble Corporation has 47,500 shares of $12 par value common stock outstanding. It declares a 15% stock dividend on December 1 when the market price per share is $19. The dividend shares are issued on December 31.

Prepare the entries for the declaration and issuance of the stock dividend. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)

Brief Exercise 14-05

For the year ending December 31, 2020, Lily Inc. reports net income $132,000 and cash dividends $81,000.

Determine the balance in retained earnings at December 31, assuming the balance in retained earnings on January 1, 2020, was $216,000.

Balance in retained earnings

$

Brief Exercise 14-07

The following information is available for Lily Corporation for the year ended December 31, 2020: cost of goods sold $206,000, sales revenue $464,000, other revenues and gains $51,000, and operating expenses $70,000.

Assuming a corporate tax rate of 30%, prepare an income statement for the company.

LILY CORPORATION Income Statement
		$
		$

Sunland Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 106,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $6,500; 2020, $14,400; and 2021, $29,000.

(a)

Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.

(b)

Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 9% and cumulative.

(c)

Journalize the declaration of the cash dividend at December 31, 2021, under part (b). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)

On October 1, Cullumber Corporation’s stockholders’ equity is as follows.

On October 1, Cullumber declares and distributes a 10% stock dividend when the market price of the stock is $14 per share.

(a)

Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.

Par value before the stock dividend		$
Par value after the stock dividend		$

(b)

Indicate the balances in the three stockholders’ equity accounts after the stock dividend shares have been distributed.

Common stock		$
Paid-in capital in excess of par value		$
Retained earnings		$

Sandhill Corporation has outstanding at December 31, 2020, 46,500 shares of $22 par value, cumulative, 7% preferred stock and 201,500 shares of $5 par value common stock. All shares were outstanding the entire year. During 2020, Sandhill earned total revenues of $2,020,000 and incurred total expenses (except income taxes) of $1,140,000. Sandhill’s income tax rate is 32%.

(a1)

Calculate Sandhill’s 2020 net income.

Net Income

$

(a2)

Caculate Sandhill’s 2020 preferred dividends. (Round answer to 0 decimal places, e.g. 5,275.)

Preferred dividends

$

(a3)

Compute Sandhill’s 2020 earnings per share. (Round answer to 2 decimal places, e.g. 2.25.)

Earnings per share

$

On January 1, 2020, Cullumber Corporation had the following stockholders’ equity accounts.

During the year, the following transactions occurred.

(a)

Journalize the transactions and the closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
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