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( b) How would the entry differ if the dividend were a liquidating dividend?( Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select " No Entry " for the account titles and enter 0 for the amounts.)
5)
Shown below is the liabilities and stockholders’ equity section
of the balance sheet for Jana Kingston Company and Mary Ann
Benson Company. Each has assets totaling $ 4,517,200.
Jana Kingston Co.
Mary Ann Benson Co.
Current liabilities
$ 315,000
Current
liabilities
$ 815,000
Long-term debt, 8 %
1,306,000
Common stock
($ 20 par)
2,990,000
Common stock($ 20 par)
2,184,000
Retained
earnings( Cash dividends, $ 327,900)
712,200
Retained earnings( Cash dividends, $ 226,100)
712,200
$ 4,517,200
$ 4,517,200
For the year, each company has earned the same income before
interest and taxes.
Jana Kingston Co.
Mary Ann Benson Co.
Income before interest and taxes
$ 1,213,000
$ 1,213,000 Interest expense
104,480
0
1,108,520
1,213,000
Income taxes( 45 %)
498,834
545,850
Net income
$ 609,686
$ 667,150
At year end, the market price of Kingston’ s stock was $ 101 per share, and Benson’ s was $ 63.50. Assume balance sheet amounts are representative for the entire year.
6) Hatch Company has two classes of capital stock outstanding: 8 %, $ 20 par preferred and $ 5 par common. At December 31, 2014, the following accounts were included in stockholders’ equity. Preferred Stock, 156,500 shares $ 3,130,000