Question

On January 1, 2019, the stockholders' equity section of Green Mountains Corporation's balance sheet reported the following: Common stock, par $1, authorized 100,000 shares, issued 10,000 shares $10,000 Additional paid-in capital 150,000 Retained earnings 160,000 During 2019, the following selected transactions occurred (assume they occurred in the order given):

April 1 Issued a 10% stock dividend when the market price was $20. The stock dividend is considered small.
May 1 200 shares of treasury stock were purchased at $18 per share.
September 1 Announced 2 for 1 stock split
December 1 Declared and paid a cash dividend of $0.5 per share.
Required: Journalize all the transactions listed above for equity during 2019.

Answer 1

Date Account Titles and Explanation Debit Credit

Apr 1 Retained earnings $20,000

[10000*10%]*$20

To common stock $1,000

{1000*$1]

To additional Paid-in-capital $19,000

-Common stock [1000*(20-1)

(To record stock dividends)

May 1 Cash $3,600

(200*$18)

To treasury stock $3,600

(To record purchase of treasury stock)

Sept 1 No entry

Dec 1 Retained earnings $10,800

[(10000+1000-200)*2]*$0.5

To cash $10,800

(To record declaration and payment of cash dividends)