\nPLEASE ANSWER EACH PROBLEMS CORRECTLY.
\n* SEE ATTACHED COPY OF AN EXCEL SPREADSHEET. FILL THE ANSWERS ON THE SECOND TAB OF THE
\nSPREADSHEET THAT SAYS “PROBLEM 15-11”<\/p>\n
PROBLEM:
\nP15-11. \t
\n(Stock and Cash Dividends)
\n7 8 9
\nEarnhart Corporation has outstanding 3,000,000 shares of common stock of a par value of $10 each. The balance in its Retained Earnings account at January 1, 2014, was $24,000,000, and it then had Paid-in Capital in Excess of Par?Common Stock of $5,000,000. During 2014, the company’s net income was $4,700,000. A cash dividend of $0.60 a share was declared on May 5, 2014, and was paid June 30, 2014, and a 6% stock dividend was declared on November 30, 2014, and distributed to stockholders of record at the close of business on December 31, 2014. You have been asked to advise on the proper accounting treatment of the stock dividend.
\nThe existing stock of the company is quoted on a national stock exchange. The market price of the stock has been as follows.
\nOctober 31, 2014\t$31
\nNovember 30, 2014\t$34
\nDecember 31, 2014\t$38
\nInstructions
\n(a) \t
\nPrepare the journal entry to record the declaration and payment of the cash dividend.
\n(b) \t
\nPrepare the journal entry to record the declaration and distribution of the stock dividend.
\n(c) \t
\nPrepare the stockholders’ equity SECTION (including schedules of retained earnings and additional paid-in capital) of the balance sheet of Earnhart Corporation for the year 2014 on the basis of the foregoing information. Draft a note to the financial statements setting forth the basis of the accounting for the stock dividend, and add separately appropriate comments or explanations regarding the basis chosen.<\/p>\n","protected":false},"excerpt":{"rendered":"
PLEASE ANSWER EACH PROBLEMS CORRECTLY. * SEE ATTACHED COPY OF AN EXCEL SPREADSHEET. FILL THE ANSWERS ON THE SECOND TAB OF THE SPREADSHEET THAT SAYS “PROBLEM 15-11” PROBLEM: P15-11. (Stock and Cash Dividends) 7 8 9 Earnhart Corporation has outstanding Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-3512","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/3512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=3512"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/3512\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=3512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=3512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=3512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}