Lance Products' balance sheet includes total assets of $320,000 and the following equity account balances at December

Question:

Lance Products' balance sheet includes total assets of $320,000 and the following equity account balances at December 31, 2009:

Capital stock:

Common stock, $5 par, 20,000 shares issued and

outstanding ......................$100,000

Paid-in capital in excess of par .............. 44,000

Total capital stock ..................$144,000

Retained earnings .................. 53,600

Total stockholders’ equity ...............$197,600

Lance’s common stock is selling for $24 per share on December 31, 2009.

Required:

1. How much would Lance Products have reported for total assets and retained earnings on December 31, 2009, if the firm had declared and paid a $10,000 cash dividend on December 31, 2009? Provide the journal entry for this cash dividend.

2. How much would Lance have reported for total assets and retained earnings on December 31, 2009, if the firm had issued a 10 percent stock dividend on December 31, 2009? Provide the journal entry for this stock dividend.

3. How much would Lance have reported for total assets and retained earnings on December 31, 2009, if the firm had effected a 2-for-1 stock split on December 31, 2009? Is a journal entry needed to record the stock split? Why or why not?

Common Stock
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Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... 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...