MGAB02H3 Lecture Notes - Retained Earnings, Stock Split

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Published on 12 Apr 2013
School
UTSC
Department
Financial Accounting
Course
MGAB02H3
Professor
Page:
of 3
Jan 1 2013, Sample company had the following:
1000 common shares outstanding 12000
5000 preferred shares outstanding $ 2 cum. 75000
(2 years div in arrears)
1Issued 500 common shares ar $ 11
Dr Cash 5500
Cr Common shares 5500
2Issued 300 shares for equipment with a PV of $ 9000. Shares were trading at $ 10
Dr Equipment 8000
Cr Common Shares 8000
3Issued 1000 Preferred shares for $ 20
Dr Cash 20000
Cr Preferred Shares 20000
4Purchased 100 ommon shares for cancellation for $ 10
Dr Common Shares 1108.69
Cr Cash 1000
Cr Contirbuted Surplus from repurchase of C/S 108.69
5Declared and paid dividends of $ 37000
P/S dividends 5000*2 10000 (Dividends in arrear)
5000*2 10000
6000*2 12000
C/S dividends 5000
37000
Dr Cash dividends C/s 5000
Dr Cash dividends P/s 32000
Cr cash 37000
62:1 Stock split
no entry
710% stock dividends declared and issued when market price per share is $ 7
# of common shares outstanding 4400
stock dividends 10%
440 at $ 7 3080
Dr Stock dividends declared 3080
Cr Common shares 3080
8Purchased 1000 common shares for cancellation at $8 per share
Dr common shares 5675.889
Dr Contrubuted surplus from repurchase 108.69
Dr Retained Earnings 2215.415
Cr Cash 8000
Date # $ $ per share
Beg. 1000 12000 12
1500 5500 11
2800 8000 10
Total 2300 25500 11.0869
4 -100 -1108.7 11.0869
Total 2200 24391.3 11.0869
64400 24391.3 5.54 (half of $ per share)
7440 3080 7
Total 4840 27471.3 5.68