dand
2. (LO 3, 4) On January 1, 2020, Hayslett AG had the following equity accounts.
Share Capital-Ordinary (€10 par value, 260,000
shares issued and outstanding)
Share Premium-Ordinary
Retained Earnings
During the year, the following transactions occurred.
April 1
May 1
June 1
Aug. 1
31
Dec. 1
Declared a €1.50 cash dividend per share to shareholders of record on April 15, payable
May 1.
Paid the dividend declared in April.
Announced a 2-for-1 share split. Prior to the split, the market price per share was €24.
Declared a 10% share dividend to shareholders of record on August 15, distributable
August 31. On August 1, the market price of the shares was €10 per share.
Issued the shares for the share dividend.
Declared a €1.50 per share dividend to shareholders of record on December 15, payable
January 5, 2021.
Determined that net income for the year was €600,000.
31
Instructions
Solution
2. a.
Apr. 1
May 1
June 1
Aug. 1
31
Dec. 1
31
1
Cash Dividends (260,000 × €1.50)
Dividends Payable
Dividends Payable
Cash
No journal entry needed for share split
Share Dividends (52,000* × €10)
Ordinary Share Dividends
Distributable (52,000 × €5)
Share Premium-Ordinary
(52,000 × €5)
*520,000 x.10
Ordinary Share Dividends Distributable
Share Capital-Ordinary
Cash Dividends (572,000** × €1.50)
Dividends Payable
**(260,000 × 2) + 52,000
Income Summary
€2,600,000
1,500,000
3,200,000
Retained Earnings
Retained Earnings
Share Dividends
Cash Dividends (€390,000+ €858,000)
390,000
390,000
520,000
|
260,000
858,000
600,000
1,768,000
390,000
390,000
260,000
260,000
Prepare dividend ent
section.
260,000
858,000
600,000
520,000
1.248,000
14.
Luz
(a) r
equ
15.
pre
16-
17
for
18
