Question

On January 1, 2020, Blossom Corporation had the following stockholders’ equity accounts.

Common Stock ($20 par value, 50,000 shares issued and outstanding)		$1,000,000
Paid-in Capital in Excess of Par—Common Stock		190,000
Retained Earnings		550,000

During the year, the following transactions occurred.

Feb. 1		Declared a $1 cash dividend per share to stockholders of record on February 15, payable March 1.
Mar. 1		Paid the dividend declared in February.
Apr. 1		Announced a 2-for-1 stock split. Prior to the split, the market price per share was $35.
July 1		Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $14 per share.
31		Issued the shares for the stock dividend.
Dec. 1		Declared a $0.30 per share dividend to stockholders of record on December 15, payable January 5, 2021.
31		Determined that net income for the year was $300,000.

Journalize the transactions and the closing entries for net income and dividends.  

Answer 1

Date	Account Titles	Debit	Credit
Feb-01	Retained Earnings	$                50,000		=50000*1
	Cash Dividend Payable		$             50,000
	(Cash dividend declared)
Mar-01	Cash Dividend Payable	$                50,000
	Cash		$             50,000
	(Dividend paid in cash)
Apr-01	Common Stock ($20 par value, 50,000 shares issued and outstanding)	$          1,000,000
	Common Stock ($10 par value, 100,000 shares issued and outstanding)		$       1,000,000
	(Stock split 2 for 1)
Jul-01	Retained Earnings	$              140,000		=100000*10%*14
	Stock Dividend Distributable		$           100,000	=100000*10%*10
	Paid-in Capital in Excess of Par—Common Stock		$             40,000	=100000*10%*4
	(10% Common Stock Dividend declared)
Jul-31	Stock Dividend Distributable	$              100,000
	Common Stock - $10 par value		$           100,000
	(Issued common stock for stock dividend)
Dec-01	Retained Earnings	$                30,000		=100000*0.3
	Cash Dividend Payable		$             30,000
	(Cash dividend declared)
Dec-31	Income Summary	$              300,000
	Retained Earnings		$           300,000
	(Transferred net income to retained earnings)