Identifying and Analyzing Financial Statement Effects of Dividends The stockholders equity of Palepu Company at...
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Accounting
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders equity of Palepu Company at December 31, 2015, appears below.
Common stock, $12 par value, 200,000 shares authorized;
82,000 shares issued and outstanding $984,000
Paid-in capital in excess of par value 480,000
Retained earnings 305,000
During 2016, the following transactions occurred: May 12 Declared and issued a 4% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share.
a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital.
b. Prepare the journal entries for these transactions.
c. Post the journal entries from b to the related T-accounts.
d. Prepare a retained earnings reconciliation for 2016 assuming that the company reports 2016 net income of $283,000.
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