Asked by Clarise Gindap on Jul 18, 2024
Verified
On January 1 2017 Raleish Corporation had $2000000 of $10 par value common stock outstanding that was issued at par and retained earnings of $1000000. The company issued 200000 shares of common stock at $12 per share on July 1. On December 15 the board of directors declared a 15% stock dividend to stockholders of record on December 31 2017 payable on January 15 2018. The market value of Raleish Corporation stock was $15 per share on December 15 and $16 per share on December 31. Net income for 2017 was $500000.
Instructions
(1) Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.
(2) Prepare the stockholders' equity section of the balance sheet for Raleish Corporation at December 31 2017.
Par Value Common Stock
The nominal or face value assigned to common stock shares in the corporation's charter, not necessarily reflecting their market value.
Stockholders' Equity
The residual interest in the assets of a corporation after deducting its liabilities; also known as shareholders' equity.
- Understand the accounting practices and effects related to stock dividends and cash dividends.
- Construct accounting records for the announcement and payment of dividends.
Verified Answer
DS
Destinee S RobinsonJul 25, 2024
Final Answer : 
(2) Stockholders' equity Paid-in capital Capital stock
Common stock, $10 par value, 400,000 shares issued and outstanding $4,000,000 Common stock dividends distributable 600,000 Total capital stock 4,600,000 Additional paid-in capital in excess of par 700,000 Total paid-in capital 5,300,000 Retained earnings 600,000 Total stockholders’ equity 5,900,000\begin{array}{cr}\text {Common stock, \(\$ 10\) par value, 400,000 shares issued and }\\\text { outstanding }& \$ 4,000,000 \\\text { Common stock dividends distributable }& 600,000 \\\text { Total capital stock }& 4,600,000 \\\text { Additional paid-in capital in excess of par } & 700,000 \\\text { Total paid-in capital } & 5,300,000\\\text { Retained earnings } &600,000 \\\text { Total stockholders' equity } &\ 5,900,000\end{array}Common stock, $10 par value, 400,000 shares issued and outstanding Common stock dividends distributable Total capital stock Additional paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders’ equity $4,000,000600,0004,600,000700,0005,300,000600,000 5,900,000
(2) Stockholders' equity Paid-in capital Capital stockCommon stock, $10 par value, 400,000 shares issued and outstanding $4,000,000 Common stock dividends distributable 600,000 Total capital stock 4,600,000 Additional paid-in capital in excess of par 700,000 Total paid-in capital 5,300,000 Retained earnings 600,000 Total stockholders’ equity 5,900,000\begin{array}{cr}\text {Common stock, \(\$ 10\) par value, 400,000 shares issued and }\\\text { outstanding }& \$ 4,000,000 \\\text { Common stock dividends distributable }& 600,000 \\\text { Total capital stock }& 4,600,000 \\\text { Additional paid-in capital in excess of par } & 700,000 \\\text { Total paid-in capital } & 5,300,000\\\text { Retained earnings } &600,000 \\\text { Total stockholders' equity } &\ 5,900,000\end{array}Common stock, $10 par value, 400,000 shares issued and outstanding Common stock dividends distributable Total capital stock Additional paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders’ equity $4,000,000600,0004,600,000700,0005,300,000600,000 5,900,000
Learning Objectives
- Understand the accounting practices and effects related to stock dividends and cash dividends.
- Construct accounting records for the announcement and payment of dividends.
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