Shareholders' equity section accounting and reporting.
Klein Corporation's stockholders' equity section at December 31,
2001 appears below: (20 Points)
Stockholders' equity
Paid-in capital
Common stock, $10 par, 50,000 outstanding $500,000
Paid-in capital in excess of par 150,000
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Total paid-in capital $650,000
Retained earnings 150,000
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Total stockholders' equity $800,000
On June 30, 2002, the board of directors of Klein Corporation
declared a 15% 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
declared. Par value of the stock was adjusted. Net income for 2002
was $240,000 and there were no cash dividends declared.
INSTRUCTIONS
(a) Prepare the journal entries on the appropriate dates to record the stock dividend and the stock split.
(b) Fill in the amount that would appear in the stockholders' equity section for Klein Corporation at December 31, 2002, for the following items:
1. Common stock $____________
2. Number of shares outstanding ____________
3. Par value per share $____________
4. Paid-in capital in excess of par $____________
5. Retained earnings $____________
6. Total stockholders' equity $____________