HORNGREN'S ACCOUNTING - Tenth Edition

S13-6
Requirements
1. Journalize for Frenchvanilla the entry declaring the cash dividends on
December 15, 2014.
2. Journalize for Frenchvanilla the entry paying the cash dividends on January 4,
2015.
Solution:
Requirement 1
Date
Accounts and Explanation
Dec. 15 2014Retained Earnings ($.50 per share x 55,000 shares)
Dividends Payable-Common
Declared a cash dividend

Debit Credit
27500
27500

Requirement 2
Date
Accounts and Explanation
Jan. 4 2015 Dividend Payable-Common
Cash
Payment of cash dividend.

Chapter 13: Corporations

Debit Credit
27500
27500

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HORNGREN'S ACCOUNTING - Tenth Edition

S13-8
Requirements
1. Journalize Supremes declaration of the stock dividend on August 15 and
distribution on August 31.
2. What is the overall effect of the stock dividend on Supremes total assets?
3. What is the overall effect on total stockholders equity?
Solution:
Requirement 1
Date
Aug 15.
Aug. 31

Accounts and Explanation

Retained Earnings (5% x $2 x 12000 shares)
Dividend Payable-Common
Dividends Payable-Common
Cash
Payment of cash dividend

Debit Credit
1200
1200
1200
1200

Requirement 2
The distrbution of a cash dividend decreases both assets (cash) and equity (retained earnigs)
as can be seen above. Supreme's total assets decreases by $1200.
Requirement 3
The effect on stockholders equity is equal and opposite to the change in Supreme's equity
from the cash dividend.

Chapter 13: Corporations

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HORNGREN'S ACCOUNTING - Tenth Edition

retained earnigs)

reme's equity

Chapter 13: Corporations

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HORNGREN'S ACCOUNTING - Tenth Edition

S13-14
Compute RARs earnings per share.
Solution:
Earnings per share = (net income-preferred dividens)/(average # of common stock outstan
Earnings per share = ($40000-$3000)/(13500+14000/2)
Earnings per share = $2.69/share

Chapter 13: Corporations

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HORNGREN'S ACCOUNTING - Tenth Edition

mmon stock outstan

Chapter 13: Corporations

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HORNGREN'S ACCOUNTING - Tenth Edition

E13-22
Requirements
1. Record the transactions in the general journal.
2. Prepare the stockholders equity section of the Evergreen balance sheet as of
April 30, 2014, for the transactions given in this exercise. Retained Earnings has
a balance of $79,000.
Solution:
Requirement 1
Date
Mar. 23

Accounts and Explanation

Cash ($15/share x 230 shares)
Common Stock - $4 par value ($4/share x 230 shares
Paid-In Capital in Excess of Par-Common
Issued common stock at a premium

Apr. 12

Inventory
Equipment
Common Stock-$4 par value ($4 x 320)
Paid-In capital in excess of par - common
Issued common stock in exchange for inventory & equip.

23000
20000

Apr. 17

Cash ($20/share x 900 shares)

Preferred Stock-$20 par value ($20/share x 900 shar
Issued prefered stock at par value of $20

18000

Chapter 13: Corporations

Debit
3450

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HORNGREN'S ACCOUNTING - Tenth Edition

Requirement 2
EVERGREEN CAPITAL CORPORATION
Balance Sheet (Partial)
April 30, 2014
Stockholders Equity
Paid-In Capital:
Preferred Stock-$20 par value; 900 shares authorized, 0 outstand
Paid-In capital in excess of par-preferred
Common Stock-$4 par value; 550 authorized; 700 outstanding
Paid-In Capital in excess of par - common
Total Paid-In Capital
Retained Earnings

Total Stockholder's Equity

Chapter 13: Corporations

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HORNGREN'S ACCOUNTING - Tenth Edition

eet as of
rnings has

Credit
920
2530

1280
41720

18000

Chapter 13: Corporations

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HORNGREN'S ACCOUNTING - Tenth Edition

$18,000
0
2200
44250
64450
79000

$143,450

Chapter 13: Corporations

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