Acc101 Financial Accounting: E12-7 HiTech Manufacturing Company has 1,000,000 shares

Acc101 Financial Accounting

Exercise 12-7 Cash Dividends, Stock Dividends and Stock Splits
HiTech Manufacturing Company has 1,000,000 shares of $1 par value capital stock outstanding January 1. The following equity transactions occurred during the current year:
Apr. 30 Distributed additional shares of capital stock in a 2-for-l stock split. Market price stock was $35 per share.
June 1 Declared a cash dividend of 60 cents per share.
July 1 Paid the 60-cent cash dividend to stockholders.
Aug. 1 Declared a 5 percent stock dividend. Market price of stock was $19 per share.
Sept. 10 Issued shares resulting from the 5 percent stock dividend declared on August 1.

a. Prepare journal entries to record the above transactions.
b.. Compute the number of shares of capital stock outstanding at year-end.
c. What is the par value per share of HiTech Manufacturing stock at the end of the year?
d. Determine the effect of each of the following on total stockholders' equity: stock split, declaration and payment of a cash dividend, declaration and distribution of a stock dividend. answers should be either increase, decrease, or no effect.)
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