During 2010, Jester Corporation had the following transactions and events. 1. Declared a cash dividend. 2. Issued

Question:

During 2010, Jester Corporation had the following transactions and events.

1. Declared a cash dividend.

2. Issued par value common stock for cash at par value.

3. Completed a 2-for-1 stock split in which $10 par value stock was changed to $5 par value stock.

4. Declared a small stock dividend when the market value was higher than par value.

5. Made a prior period adjustment for overstatement of net income.

6. Issued the shares of common stock required by the stock dividend declaration in item no. 4 above.

7. Paid the cash dividend in item no. 1 above.

8. Issued par value common stock for cash above par value.

Instructions

Indicate the effect(s) of each of the foregoing items on the subdivisions of stockholders' equity. Present your answer in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect. Item no. 1 is given as anexample.

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Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Accounting Principles

ISBN: 978-0470533475

9th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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