Serra do Mar Corporation manufactures and distributes leisure clothing. Selected transactions completed by Serra do Mar during

Question:

Serra do Mar Corporation manufactures and distributes leisure clothing. Selected transactions completed by Serra do Mar during the current fiscal year are as follows:

Jan. 8 Split the common stock 3 for 1 and reduced the par from $18 to $6 per share. After the split, there were 600,000 common shares outstanding.

Mar. 20 Declared semiannual dividends of $1 on 20,000 shares of preferred stock and $0.14 on the 600,000 shares of $10 par common stock to stockholders of record on March 31, payable on April 20.

Apr. 20 Paid the cash dividends.

May 8 Purchased 50,000 shares of the corporation’s own common stock at $48, recording the stock at cost.

Aug. 2 Sold 30,000 shares of treasury stock at $56, receiving cash.

Sept. 15 Declared semiannual dividends of $1 on the preferred stock and $0.07 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding, to be capitalized at the fair market value of the common stock, which is estimated at $52.

Oct. 15 Paid the cash dividends and issued the certificates for the common stock dividend.

Instructions

Journalize the transactions.


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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting An Integrated Statements Approach

ISBN: 978-0324312119

2nd Edition

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

Question Posted: