Ex. 12–10
Feb. 13 Cash Dividends.................................................... 120,000
Cash Dividends Payable ................................
Mar. 15 No entry required.
Apr. 10 Cash Dividends Payable ..................................... 120,000
Cash ................................................................
Ex. 12–11
Feb. 9 No entry required. The stockholders ledger would be revised to
record the increased number of shares held by each stockholder.
Apr. 10 Cash Dividends.................................................... 57,000*
Cash Dividends Payable ................................
* [(12,000 shares × $1) + (900,000 shares
× $0.05)]
May 1 Cash Dividends Payable ..................................... 57,000
Cash ................................................................
Oct. 12 Cash Dividends.................................................... 147,000*
Cash Dividends Payable ................................
* [(12,000 shares × $1) + (900,000 shares
× $0.15)]
12 Stock Dividends................................................... 432,000**
Stock Dividends Distributable ......................
Paid-In Capital in Excess of
Par—Common Stock .....................................
** (900,000 shares × 1% × $48)
Nov. 14 Cash Dividends Payable .....................................
147,000
Cash ................................................................
14 Stock Dividends Distributable ............................ 360,000
Common Stock ...............................................
Ex. 12–12
Stockholders’ Equity
Paid-in capital:
120,000
120,000
57,000
57,000 147,000
360,000 72,000
147,000 360,000
Preferred $2 stock, $100 par (80,000 shares authorized,
7,500 shares issued) .................. Excess of issue price over par ....... Common stock, no par, $5 stated value (200,000 shares author- ized, 112,500 shares issued) ..... Excess of issue price over par ....... From sale of treasury stock ............ Total paid-in capital ...................
$750,000
90,000 $840,000
$562,500 75,000
637,500
63,750
$1,541,250
Ex. 12–13
BRAVO CORPORATION Retained Earnings Statement For the Year Ended July 31, 2006
Retained earnings, August 1, 2005 ................................... 2,213,400
Net income ......................................................................... Less dividends declared ................................................... Increase in retained earnings ........................................... Retained earnings, July 31, 2006 ......................................
$
$558,000
330,000 228,000 $2,441,400 Ex. 12–14
a. 1.9% ($1.26 ÷ $67.44)
b. Hershey’s dividend yield is above average for similar companies.
Thus, it is likely that most stockholders are looking for current dividends as well as an increase in market price.