Question

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows: Jan. 8 Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 157,000 common shares outstanding. Declared semiannual dividends of $0.65 per share on 19,000 shares of preferred stock and $0.24 per share on the common stock payable on July 1. Apr. 30 Jul. 1 Paid the cash dividends. Oct. 31 Declared semiannual dividends of $0.65 per share on the preferred stock and $0.11 per share on the common stock (before the stock dividend). In addition, a 3% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $52. Dec. 31 Paid the cash dividends and issued the certificates for the common stock dividend.

Answer 1

Ans:

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
Jan.8	No Entry
April 30	Dividends	50,030
	Dividends Payable [(19,000*$0.65)+(157,000*$0.24)]		50,030
July 1	Dividends Payable	50,030
	Cash		50,030
Oct.31	Dividends	29,620
	Dividends Payable [(19,000*$0.65)+(157,000*$0.11)]		29,620
	Stock Dividends (157,000*3%*$52)	244,920
	Common Stock Dividend Distributable (157,000*3%*$40)		188,400
	Paid in capital in excess of par		56,520
Dec.31	Dividends Payable	29,620
	Cash		29,620
	Common Stock Dividend distributable	188,400
	Common Stock		188,400