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Chapter 13: Q15RQ (page 707)
What is a stock dividend?
A stock dividend is an appropriation of a corporation's own stock to its stockholders.
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If stock is issued for assets other than cash describe the recording of this transaction
Journalizing issuance of stock and preparing the stockholders’ equity section of the balance sheet
The charter of Evergreen Corporation authorizes the issuance of 900 shares of preferred stock and 1,400 shares of common stock. During a two-month period, Evergreen completed these stock-issuance transactions:
Mar. 23 Issued 230 shares of \(3 par value common stock for cash of \)15 per share.
Apr. 12 Received inventory with a market value of \(27,000 and equipment with a market value of \)19,000 for 320 shares of the \(3 par value common stock.
17 Issued 900 shares of 5%, \)20 par value preferred stock for \(20 per share.
Requirements
2. Prepare the stockholders’ equity section of the Evergreen balance sheet as of April 30, 2018, for the transactions given in this exercise. Retained Earnings has a balance of \)73,000 at April 30, 2018
Question: Copperhead Trust has the following classes of stock:
Preferred Stock—6%, \(12 par value; 8,500 shares authorized, 7,000 shares issued and outstanding
Common Stock—\)0.10 par value; 2,100,000 shares authorized, 1,400,000 shares issued and outstanding
Requirements
2. Assume the preferred stock is cumulative and Copperhead passed the preferred dividend in 2016 and 2017. In 2018, the company declares cash dividends of $46,000. How much of the dividend goes to preferred stockholders? How much goes to common stockholders?
Question: Accounting for the purchase and sale of treasury stock
Discount Furniture, Inc. completed the following treasury stock transactions in 2018:
Dec. 1 Purchased 1,900 shares of the company’s \(1 par value common stock as treasury stock, paying cash of \)5 per share.
15 Sold 200 shares of the treasury stock for cash of \(8 per share.
20 Sold 1,000 shares of the treasury stock for cash of \)1 per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on December 20 is $2,400.)
Requirements
2. How will Discount Furniture, Inc. report treasury stock on its balance sheet as of December 31, 2018?
What does the statement of stockholders’ equity report? How does the statement of stockholders’ equity differ from the statement of retained earnings?
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