Winterborn manufacturing co. completed the following transactions during 2016:
jan 16. declared a cash dividend on the 4â%, â$100 par noncumulative preferred stock â(950 sharesâ outstanding). declared a $ 0.30 per share dividend on the 90,000 shares of â$10 par value common stock outstanding. the date of record is januaryâ 31, and the payment date is february 15.
feb. 15. paid the cash dividends. jun. 10. split common stock 2-for-1.july 30. declared a 50% stock dividend on the common stock. the market value of the common stock was $10 per share. aug. 15. distributed the stock dividend. oct. 26. purchased 1,400 shares of treasury stock at $9 per share. nov. 8. sold 700 shares of treasury stock for $11 per share. nov. 30. sold 500 shares of treasury stock for $6 per sharerequired: 1. record the transactions in winterborn's general journal.2. prepare the winterborn's stockholders' equity section of the balance sheet as of december 31, 2016.

Dividends 30,800 debit

 Dividends payable    30,800 credit

--to record cash dividends declared--

Dividends payable    30,800 debit

                 Cash                      30,800 credit

--to record payment of cash dividends--

Jun 10 no entry required the split do not change the total value of the preferred stock

August 15th

Retained earnings 450,000 debit

        Common stock          450,000 credit

--to record stock dividends--

treasury stock   12,600 debit

       cash                        12,600 credit

--to record purchase of treasury stock--

cash     7,700 debit

     treasury stock    6,300 credit

    additional paid-in TS 1,400 credit

--to record sale of TS--

cash                         3,000 debit

additional paid-in TS  500 debit

          treasury stock           3,500 credit

--to record sale of TS--

Explanation:

Jan 16th cash dividends 950 shares x $100 par x 4% = $3,800

90,000 shares x 0.30 per share = 27,000

Total 27,000 + 3,800 = 30,800

July 30th:

value of the stock dividends:

90,000 shares x $10 x 50% = 450,000

recorded when distributed.

Treasury stock: we record at cost. Then at sale date we compare with this cost and determinate wether we create an additional paid-in for the stock or if we should decrease retained earnings when sale at "loss"

purchase: 1,400 shares x $9 per share = 12,600

sale 700 x $11 = 7,700

cost 700 x $ 9 = 6,300

addtional paid in TS 1,400

second sale 500 x $ 6 = 3,000

cost               500 x $ 7 = 3,500

decrease in additional paid-in TS 500

they work in some type of way

answer; synthetic production system;