Question

On January 1, 2021, Gerlach Inc. had the following account balances in its shareholders' equity accounts. Common stock, $1 par, 256,000 shares issued $256,000
Paid-in capital—excess of par, common 512,000
Paid-in capital—excess of par, preferred 130,000
Preferred stock, $100 par, 13,000 shares outstanding 1,300,000
Retained earnings 2,600,000
Treasury stock, at cost, 5,600 shares 28,000
During 2021, Gerlach Inc. had several transactions relating to common stock.
January 15: Declared a property dividend of 100,000 shares of Slowdown Company (book value $10.6 per share, fair value $9.30 per share).
February 17: Distributed the property dividend.
April 10: A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. The fair value of the stock was $4 on this date.
July 18: Declared and distributed a 3% stock dividend on outstanding common stock; fair value per share, $5.
December 1: Declared a 50 cents per share cash dividend on the outstanding common shares.
December 20: Paid the cash dividend.
Required:
Record the above transactions and events in journal entry format.

Answer 1

Answer:

On January 1, 2021, Gerlach Inc. had the following account balances in its shareholders' equity accounts. Common stock, $1 par, 256,000 shares issued $256,000

Paid-in capital—excess of par, common 512,000

Paid-in capital—excess of par, preferred 130,000

Preferred stock, $100 par, 13,000 shares outstanding 1,300,000

Retained earnings 2,600,000

Treasury stock, at cost, 5,600 shares 28,000

During 2021, Gerlach Inc. had several transactions relating to common stock.

January 15: Declared a property dividend of 100,000 shares of Slowdown Company (book value $10.6 per share, fair value $9.30 per share).

February 17: Distributed the property dividend.

April 10: A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. The fair value of the stock was $4 on this date.

July 18: Declared and distributed a 3% stock dividend on outstanding common stock; fair value per share, $5.

December 1: Declared a 50 cents per share cash dividend on the outstanding common shares.

December 20: Paid the cash dividend.

Required:

Record the above transactions and events in journal entry format.