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problem: Klein Corporation's stockholders' equity section at December 31, 2001 appears below:  Stockholders' equity Paid-in capital

    Common stock, $10 par, 50,000 outstanding    $500,000

    Paid-in capital in excess of par             150,000

                                                                ————————

    Total paid-in capital                                $650,000

    Retained earnings                                   150,000

                                                                ————————

    Total stockholders' equity                     $800,000                                                         

On June 30, 2002, the board of directors of Klein Corporation announced a 15 percent stock dividend, payable on July 31, 2002, to stockholders of record on July 15, 2002. The fair market value of Klein Corporation's stock on June 30, 2002, was $12. 

On December 1, 2002, the board of directors declared a 2 for 1 stock split effective December 15, 2002. Klein Corporation's stock was selling for $20 on December 1, 2002, before the stock split was announced. Par value of the stock was adjusted. Net income for 2002 was $240,000 & there were no cash dividends declared.

    INSTRUCTIONS

    [A] Make journal entries on the appropriate dates to record the stock dividend and the stock split.

    [B] Find the amount that would appear in the stockholders' equity section for Klein Corporation at December 31, 2002, for the following items: 

(a) Common stock      

(b) Number of shares outstanding          

(c) Par value per share                  

(d) Paid-in capital in excess of par     

(e) Retained earnings                    

(f) Total stockholders' equity        

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920432

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