On January 1, 2012, Stengel Corporation, a publicly traded company, had these shareholders' equity accounts: Common shares

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On January 1, 2012, Stengel Corporation, a publicly traded company, had these shareholders' equity accounts:
Common shares (no par value, unlimited number of shares authorized, 75,000 issued).$1,700,000
Retained earnings......................................................................................900,000
Accumulated other comprehensive loss............................................................125,000
During the year, the following transactions occurred:
Feb. 1 Declared a $1 per share cash dividend to shareholders of record on February 15, payable March 1.
Apr. 1 Effected a 3-for-1 stock split. On April 1, the share price was $36.
July 1 Declared a 5% stock dividend to shareholders of record on July 15, distributable July 31. On July 1, July 15, and July 31, the share prices were $14, $13.50, and $13.75, respectively.
Dec. 31 Determined that profit for the year was $400,000.
Instructions
(a) Record the above transactions, including any required closing entries.
(b) Open T accounts as required and post to the shareholders' equity accounts.
(c) Prepare a statement of changes in equity for the year.
(d) Prepare the shareholders' equity section of the statement of financial position at December 31.
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...
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Financial Accounting Tools for Business Decision Making

ISBN: 978-1118024492

5th Canadian edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine

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