Question

Dearborn Manufacturing, Co. completed the following transactions during 2014:
Jan. 16 Declared a cash dividend on the 6%, $ 95 par noncumulative preferred stock (1,000 shares outstanding). Declared a $ 0.55 per share dividend on the 90,000 shares of $ 10 par value common stock outstanding. The date of record is January 31, and the payment date is February 15.
Feb. 15 Paid the cash dividends.
Jun. 10 Split common stock 2-for-1.
Jul. 30 Declared a 30% stock dividend on the common stock. The market value of the common stock was $ 12 per share.
Aug. 15 Distributed the stock dividend.
Oct. 26 Purchased 3,000 shares of treasury stock at $ 10 per share.
Nov. 8 Sold 1,500 shares of treasury stock for $ 11 per share.
30 Sold 700 shares of treasury stock for $ 7 per share.

Requirements
1. Record the transactions in Dearborn’s general journal.
2. Prepare the Dearborn’s stockholders’ equity section of the balance sheet as of December 31, 2014. Assume that Dearborn was authorized to issue 4,000 shares of preferred stock and 400,000 shares of common stock. Both preferred stock and common stock were issued at par. The ending balance of retained earnings as of December 31, 2014, is $ 2,020,000.



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  • CreatedJanuary 16, 2015
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