The stockholders’ equity section of Jet Moving Company’s balance sheet as of December 31, 2011, appears below.Contributed capitalCommon stock, $2 par value, 6,000,000 shares authorized, 1,000,000 shares issued and outstanding ….. $2,000,000Additional paid-in capital ……….. 800,000Total contributed capital ………… $2,800,000Retained earnings ……………. 2,160,000Total stockholders’ equity ……….. $4,960,000The company engaged in the following stockholders’ equity transactions during 2012:Mar. 5 Declared a $0.40 per share cash dividend to be paid on April 6 to stockholders of record on March 20.20 Date of record.Apr. 6 Paid the cash dividend.June 17 Declared a 10 percent stock dividend to be distributed August 17 to stockholders of record on August 5. The market value of the stock was $14 per share.Aug. 5 Date of record for the stock dividend.17 Distributed the stock dividend.Oct. 2 Split its stock 2 for 1.Dec. 27 Declared a cash dividend of $0.20 payable January 27, 2013, to stockholders of record on January 14, 2013.REQUIRED1. Prepare journal entries to record the 2012 transactions.2. Prepare the stockholders’ equity section of Jet Moving Company’s balance sheet as of December 31, 2012. Assume net income for the year is $800,000.3. If you owned some shares of Jet, would you expect the total value of your shares to go up or down as a result of the stock dividends and stock split? What intangibles might affect the stock value?View Solution:
The stockholders equity section of Jet Moving Company s balance sheet



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