Financial Accounting Homework Help?

Prepare journal entries, as appropriate, for each of the following six transactions. Ensure that your journal entries are consistent with GAAP treatment of the transactions.

1. May 27, 2008: ArcadiaCorp sells 1,000,000 shares of stock for $25 per share, a total of $25,000,000. The par value of the stock is $1 per share.

2. December 27, 2008: ArcadiaCorp buys back 200,000 shares of the stock it had issued on May 27, 2008. ArcadiaCorp pays $30 for each share of the stock. This is the first and only time that ArcadiaCorp has bought treasury stock.

3. November 5, 2009: ArcadiaCorp sells, at a price of $35 per share, 100,000 shares of treasury stock.

4. November 19, 2009: ArcadiaCorp declares a cash dividend of $3 per share of stock. The date of record for the dividend is January 10, 2010.

5. February 1, 2010: ArcadiaCorp pays the cash dividend of $3 per share of stock.

6. April 1, 2010: Arcadia Corp declares a 2-for-1 stock split effective May 1, 2010.

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  • JKRB
    Lv 7
    9 years ago
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    1. May 27, 2008: ArcadiaCorp sells 1,000,000 shares of stock for $25 per share, a total of $25,000,000. The par value of the stock is $1 per share.

    Dr Cash 25,000,000

    Cr Paid-In Capital in Excess of Par 24,000,000

    Cr Common Stock 1,000,000

    2. December 27, 2008: ArcadiaCorp buys back 200,000 shares of the stock it had issued on May 27, 2008. ArcadiaCorp pays $30 for each share of the stock. This is the first and only time that ArcadiaCorp has bought treasury stock.

    Dr Treasury Stock 6,000,000

    Cr Cash 6,000,000

    3. November 5, 2009: ArcadiaCorp sells, at a price of $35 per share, 100,000 shares of treasury stock.

    Dr Cash 3,500,000

    Cr Common Treasury Stock 3,000,000

    Cr Paid-In Capital from Sale of Treasury Stock 500,000

    4. November 19, 2009: ArcadiaCorp declares a cash dividend of $3 per share of stock. The date of record for the dividend is January 10, 2010.

    There are 900,000 shares outstanding

    Dr Retained Earnings 2,700,000

    Cr Dividends Payable 2,700,000

    5. February 1, 2010: ArcadiaCorp pays the cash dividend of $3 per share of stock.

    Dr Dividends Payable 2,700,000

    Cr Cash 2,700,000

    6. April 1, 2010: Arcadia Corp declares a 2-for-1 stock split effective May 1, 2010.

    Stock splits need no formal journal entry.

    Source(s): Accounting Fan
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