On October 1, 2021. Nicklaus Corporation recerves permission to replace its $1 par value common stock...

 

Transcribed Image Text:

On October 1, 2021. Nicklaus Corporation recerves permission to replace its $1 par value common stock (4,000,000 shares authorized, 2,000,000 shares issued, and 1.900,000 shares outstanding) with a new common stock issue having a $0.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split That IS, the shareholders will receive two shares of the S0 50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the ISsuing corporation. On November 1, 2021, the Nicklaus Corporation declares a $0 08 per share cash dividend on common stock and a s024 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2021, to shareholders of record on November 15, 2021 On December 2, 2021, the Nicklaus Corporation dectares a 2% stock dividend payable on December 28, 2021, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 76,000 (0.02 - 3.800,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the deciaration and payment of these stock and cash dividends 2 Prepare the December 31, 2021, shareholders equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2.200,000) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021. On October 1, 2021. Nicklaus Corporation recerves permission to replace its $1 par value common stock (4,000,000 shares authorized, 2,000,000 shares issued, and 1.900,000 shares outstanding) with a new common stock issue having a $0.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split That IS, the shareholders will receive two shares of the S0 50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the ISsuing corporation. On November 1, 2021, the Nicklaus Corporation declares a $0 08 per share cash dividend on common stock and a s024 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2021, to shareholders of record on November 15, 2021 On December 2, 2021, the Nicklaus Corporation dectares a 2% stock dividend payable on December 28, 2021, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 76,000 (0.02 - 3.800,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the deciaration and payment of these stock and cash dividends 2 Prepare the December 31, 2021, shareholders equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2.200,000) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021.

Answer rating: 100% (QA)

Part C Requirement 1 Date Accout Titles Explanation Debit Credit 1Oct NO ENTRY 1Nov Retained earning... View the full answer