Acc280 Financial Accounting: P14-1A On January 1, 2012, Kristen Corporation had the following

Acc280 Financial Accounting

Problem 14-1A (a-d)
On January 1, 2012, Kristen Corporation had the following stockholders’ equity accounts.
Common Stock ($20 par value, 60,000 shares issued and outstanding) 1,200,000
Paid-in-Capital in Excess of Par- Common Stock 200,000
Retained Earnings 600,000

During the year, the following transactions occurred.
Feb 1. Declared a $1 cash dividend per share to stockholders of record on February 15, payable March 1
Mar 1. Paid the dividend declared in February
Apr 1. Announced a 2-for-1 stock split. Prior to the split, the market price per share was $36
July 1. Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $13 per share
July 31. Issued the shares for the stock dividend
Dec 1. Declared a $.50 per share dividend to stockholders of record on December 15, payable January 5, 2013
Dec 31. Determined that the net income for the year was $350,000

a. Journalize the transactions and the closing entry for net income
b. Enter the beginning balances, and post the entries to the stockholders' equity accounts (Note: Open additional stockholders' equity accounts as needed).
c. Prepare a stockholders' equity section at December 31
d. Sales declined in fiscal 2008. Does that mean that profitability, as measured by the gross profit rate, necessarily also declined? Calculate the gross profit rate for each fiscal year. (Round answers to 1 decimal place, e.g. 10.5.)
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