Shareholders’ equity transactions; statement of shareholders’ equity

P 18-5 Shareholders’ equity transactions; statement of shareholders’ equity
Listed
below are the transactions that affected the shareholders’ equity of
Branch-Rickie Corporation during the period 2011–2013. At December 31,
2010, the corporation’s accounts included:
($ in 000s)
Common stock, 105 million shares at $1 par $105,000
Paid-in capital-excess of par 630,000
Retained earnings 970,000
a.
November 1, 2011, the board of directors declared a cash dividend of
$.80 per share on its common shares, payable to shareholders of record
November 15, to be paid December 1.
b. On March 1, 2012, the board of
directors declared a property dividend consisting of corporate bonds of
Warner Corporation that Branch-Rickie was holding as an investment. The
bonds had a fair value of $1.6 million, but were purchased two years
previously for $1.3 million. Because they were intended to be held to
maturity, the bonds had not been previously written up. The property
dividend was payable to shareholders of record March 13, to be
distributed April 5.
c. On July 12, 2012, the corporation declared
and distributed a 5% common stock dividend (when the market value of the
common stock was $21 per share). Cash was paid in lieu of fractional
shares representing 250,000 equivalent whole shares.
d. On November
1, 2012, the board of directors declared a cash dividend of $.80 per
share on its common shares, payable to shareholders of record November
15, to be paid December 1.
e. On January 15, 2013, the board of
directors declared and distributed a 3-for-2 stock split effected in the
form of a 50% stock dividend when the market value of the common stock
was $22 per share.
f. On November 1, 2013, the board of directors
declared a cash dividend of $.65 per share on its common shares, payable
to shareholders of record November 15, to be paid December 1.
Required:
1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
2.
Prepare comparative statements of shareholders’ equity for
Branch-Rickie for the three-year period ($ in 000s). Net income was $330
million, $395 million, and $455 million for 2011, 2012, and 2013,
respectively.

 

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