9. Chapter 18 Problem: ATP, Inc. ended YR1 with the following stockholders' equity section: Common stock, 105 million shares at $1 par Paid-in capital-excess of par Retained earnings YR1 105,000,000 630,000,000 970,000,000.00 1,705,000,000 Listed below are the transactions that affected stockholders' equity in YR2, YR3, and YR4: a. November 1, YR2, the board of directors declared a cash dividend of $0.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. b. On March 10, YR3, the board of directors declared a property dividend consisting of corporate bonds of ACT, Inc that ATP was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million which is the book value of the bonds. The property dividend was payable to shareholders of record March 23, to be distributed April 15. c. On July 22, YR3, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). d. On November 11, YR3, the board of directors declared a cash dividend of $0.80 per share on its common shares, payable to shareholders of record November 10, to be paid December 10. e. On January 25, YR4, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share. The company elects to reduce retained earnings as a result of the split. f. On November 1, YR4, the board of directors declared a cash dividend of $0.65 per share on its common shares, payable to shareholders of record November 25, to be paid December 23. Required: 1. Prepare the journal entries that ATP recorded during the three-year period for these transactions. 2. Prepare the shareholders' equity section at the end of YR4 for ATP. Assume net income for YR2 through YR4 was $330 million, $395 million, and $455 million respectively. 9. Chapter 18 Problem: ATP, Inc. ended YR1 with the following stockholders' equity section: Common stock, 105 million shares at $1 par Paid-in capital-excess of par Retained earnings YR1 105,000,000 630,000,000 970,000,000.00 1,705,000,000 Listed below are the transactions that affected stockholders' equity in YR2, YR3, and YR4: a. November 1, YR2, the board of directors declared a cash dividend of $0.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. b. On March 10, YR3, the board of directors declared a property dividend consisting of corporate bonds of ACT, Inc that ATP was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million which is the book value of the bonds. The property dividend was payable to shareholders of record March 23, to be distributed April 15. c. On July 22, YR3, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). d. On November 11, YR3, the board of directors declared a cash dividend of $0.80 per share on its common shares, payable to shareholders of record November 10, to be paid December 10. e. On January 25, YR4, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share. The company elects to reduce retained earnings as a result of the split. f. On November 1, YR4, the board of directors declared a cash dividend of $0.65 per share on its common shares, payable to shareholders of record November 25, to be paid December 23. Required: 1. Prepare the journal entries that ATP recorded during the three-year period for these transactions. 2. Prepare the shareholders' equity section at the end of YR4 for ATP. Assume net income for YR2 through YR4 was $330 million, $395 million, and $455 million respectively