On January 1, 2017, Tacoma Corporation had these stockholders' equity accounts. Common Stock ($10 par value, 70,000

Question:

On January 1, 2017, Tacoma Corporation had these stockholders' equity accounts.

Common Stock ($10 par value, 70,000 shares issued and outstanding) .............$700,000

Paid-in Capital in Excess of Par Value .................................................... 500,000

Retained Earnings............................................................................ 620,000

During the year, the following transactions occurred.

Jan. 15Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15.

Feb. 15 Paid the dividend declared in January.

Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable

May 15. On April 15, the market price of the stock was $14 per share.

May 15 Issued the shares for the stock dividend.

Dec. 1 Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2018.

31 Determined that net income for the year was $400,000.

Instructions

(a) Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)

(b) Enter the beginning balances and post the entries to the stockholders' equity T-accounts. (Note: Open additional stockholders' equity accounts as needed.)

(d) Calculate the payout ratio and return on common stockholders' equity.

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