Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding
Journalize the following Baxter transactions for 20XX:
Feb. 1 Purchased 200 shares of treasury stock at $6.00.
20 Declared a $2.00 per share cash dividend payable on March 15
to stockholders of record March 1.
Mar. 15 Paid the cash dividend.
May 10 Declared a 10% stock dividend. The market value of the stock is $15.00 per share.
May 30 Distributed the stock dividend.
Jun 10 Reissued the treasury stock for $9.00.
What will be an ideal response?
Answer:
Feb. 1 Treasury Stock (200 × $6) 1,200
Cash 1,200
Feb. 20 Retained Earnings (800 × $2) 1,600
Dividends Payable 1,600
Mar. 15 Dividends Payable 1,600
Cash 1,600
May 10 Retained Earnings [(800 × 10%) × $15 mkt] 1,200
Common Stock Dividend Distributable [(800 × 10%) × $5 par] 400
Paid-In Capital in Excess of Par Value-
Stock Dividend 800
May 30 Common Stock Dividend Distributable 400
Common Stock 400
June 10 Cash (200 × $9) 1,800
Treasury Stock (200 × $6) 1,200
Paid-In Capital from Treasury Stock 300
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