Listed below are the transactions that affected theshareholders’ equity of Branch-Rickie Corporation during the period2018–2020. At December 31, 2017, the corporation’s accountsincluded:
| ($in 000s) |
| Common stock, 105 million shares at $1 par | $ | 105,000 |
| Paid-incapital—excess of par | | 630,000 |
| Retainedearnings | | 970,000 |
|
- November 1, 2018, the board of directors declared a cashdividend of $.80 per share on its common shares, payable toshareholders of record November 15, to be paid December 1.
- On March 1, 2019, the board of directors declared a propertydividend consisting of corporate bonds of Warner Corporation thatBranch-Rickie was holding as an investment. The bonds had a fairvalue of $1.6 million, but were purchased two years previously for$1.3 million. Because they were intended to be held to maturity,the bonds had not been previously written up. The property dividendwas payable to shareholders of record March 13, to be distributedApril 5.
- On July 12, 2019, the corporation declared and distributed a 5%common stock dividend (when the market value of the common stockwas $21 per share). Cash was paid in lieu of fractional sharesrepresenting 250,000 equivalent whole shares.
- On November 1, 2019, the board of directors declared a cashdividend of $.80 per share on its common shares, payable toshareholders of record November 15, to be paid December 1.
- On January 15, 2020, the board of directors declared anddistributed a 3-for-2 stock split effected in the form of a 50%stock dividend when the market value of the common stock was $22per share.
- On November 1, 2020, the board of directors declared a cashdividend of $.65 per share on its common shares, payable toshareholders of record November 15, to be paid December 1.
Required:
1. Prepare the journal entries that Branch-Rickierecorded during the three-year period for these transactions.
2. Prepare comparative statements of shareholders'equity for Branch-Rickie for the three-year period. Net income was$330 million, $395 million, and $455 million for 2018, 2019, and2020, respectively.
