The stockholders' equity of Kinney Company at December 31, 2018. is shown below: 5% preferred stock, $100
Question:
The stockholders' equity of Kinney Company at December 31, 2018. is shown below:
5% preferred stock, $100 par value, 10,000 shares authorized;
4,000 shares issued and outstanding ............................................... $ 400,000
Common stock, $5 par value, 200,000 shares authorized:
50,000 shares issued and outstanding .................................................. 250,000
Paid-in capital in excess of par value-preferred stock ........................... 40,000
Paid-in capital in excess of par value-common stock ............................ 300,000
Retained earnings ........................................................................................ 656,000
Total stockholders' equity ............................................................................ $1,646,000
The following transactions. among others. occurred during 2019.
Apr. 1 Declared and issued a IO0% stock dividend on all outstanding shares of common stock.
The market value of the stock was $11 per share.
Dec. 7 Declared and issued a 3% stock dividend on all outstanding shares of common stock.
The market value of the stock was $14 per share.
Dec. 20 Declared and paid (I) the annual cash dividend on the preferred stock and (2) a cash dividend of 80 cents per common share.
a. Using the financial statement effects template, illustrate the effects of these transactions.
b. Prepare the journal entries for these transactions.
c. Post the journal entries from b to the related T-accounts.
d. Prepare a 2019 retained earnings reconciliation assuming that the company reports 2019 net income of $253,000.
Step by Step Answer:
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman