ACCOUNTING BASICS LESSON FIFTEEN STOCK TRANSACTIONS, DIVIDENDS, AND STOCK SPLITS PROBLEMS TO WORK

1. On May 5, The ABC Company issued for cash 50,000 shares of $10 par common stock for $20. What journal entry is needed to record this transaction?

2. On August 15, The ABC Company issued for cash 80,000 shares of $6 par preferred stock at $10. What journal entry is needed to record this transaction?

3. What is the total amount invested (total paid-in capital) by all stockholders of the ABC Company as of August 30?

ACCOUNTING BASICS LESSON FIFTEEN STOCK TRANSACTIONS, DIVIDENDS, AND STOCK SPLITS PROBLEMS TO WORK 4. The date of declaration, date of record, and payment dates in connection with a cash dividend of $275,000 on a corporation’s common stock are June 1, July 1, and August 3. Journalize the entries required on each date. Date of Declaration June 1

Date of Record July 1

Payment Date August 3

5. The ABC Company had 90,000 shares of common stock outstanding. They declared a 2 for 1 stock split (1 additional share for each share issued). The market price per share before the stock split was $200. a) What will the number of shares outstanding be after the stock split?

b) What would the approximate market price per share be after the stock split?