On January 1, 2017, Belgium Industries SA had the following equity accounts. Share Capital-Ordinary (4 par value,

Question:

On January 1, 2017, Belgium Industries SA had the following equity accounts.

Share Capital-Ordinary (€4 par value, 250,000 shares issued and outstanding)....€1,000,000

Share Premium-Ordinary........................................................................200,000

Retained Earnings..................................................................................840,000

During the year, the following transactions occurred.

Jan. 15 Declared a €1 cash dividend per share to shareholders of record on January 31, payable February 15.

Feb. 15 Paid the dividend declared in January.

Apr. 15 Declared a 10% share dividend to shareholders of record on April 30, distributable May 15. On April 15, the market price was €11 per share.

May 15 Issued the shares for the share dividend.

July 1 Announced a 2-for-1 share split. The market price per share prior to the announcement was €12. (The new par value is €2.)

Dec. 1 Declared a €0.50 per share cash dividend to shareholders of record on December 15, payable January 10, 2018.

31 Determined that net income for the year was €264,000.

Instructions

(a) Journalize the transactions and the closing entries for net income and dividends.

(b) Enter the beginning balances, and post the entries to the equity accounts. (Note: Open additional equity accounts as needed.)

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,...