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ACC 291 WileyPLUS Assignment: Week 4 Assignment

Resource: WileyPLUS

Complete the following Week 4 Assignment in WileyPLUS:

• Do It! 11-1

• Exercise 11-5

• Exercise 11-07

• BYP 11-1

• BYP 11-2

• Problem 11-5A

• Problem 11-8A

Do It! Review 11-1

Your answer is correct.

Indicate whether each of the following statements is true or false.

1. The corporation is an entity separate and distinct from its owners.

2. The liability of stockholders is normally limited to their investment in the corporation.

3. The relative lack of government regulation is an advantage of the corporate form of business.

4. There is no journal entry to record the authorization of capital stock.

5. No-par value stock is quite rare today.

Exercise 11-5

Your answer is correct.

Garcia Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.

May 2 Cash 113,680

Capital Stock 113,680

(Issued 8,120 shares of $11 par value common stock at $14 per share)

10 Cash 637,740

Capital Stock 637,740

(Issued 11,810 shares of $19 par value preferred stock at $54 per share)

15 Capital Stock 7,670

Cash 7,670

(Purchased 590 shares of common stock for the treasury at $13 per share)

On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

CLOSE

Exercise 11-7

Your answer is correct.

On October 31, the stockholders’ equity section of Pele Company’s balance sheet consists of common stock $377,200 and retained earnings $438,500.

Pele is considering the following two courses of action:

(1) Declaring a 7% stock dividend on the 94,300 $4 par value shares outstanding

(2) Effecting a 2-for-1 stock split that will reduce par value to $2 per share.

The current market price is $16 per share.

Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and outstanding shares.

Broadening Your Perspective 11-1

The stockholders’ equity section of Tootsie Roll Industries’ balance sheet is shown in the Consolidated Statement of Financial Position. (Note that Tootsie Roll has two classes of common stock. To answer the following questions, add the two classes of stock together.)

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)

For the year ended December 31,

2011 2010 2009

Net product sales $528,369 $517,149 $495,592

Rental and royalty revenue 4,136 4,299 3,739

Total revenue 532,505 521,448 499,331

Product cost of goods sold 365,225 349,334 319,775

Rental and royalty cost 1,038 1,088 852

Total costs 366,263 350,422 320,627

Product gross margin 163,144 167,815 175,817

Rental and royalty gross margin 3,098 3,211 2,887

Total gross margin 166,242 171,026 178,704

Selling, marketing and administrative expenses 108,276 106,316 103,755

Impairment charges — — 14,000

Earnings from operations 57,966 64,710 60,949

Other income (expense), net 2,946 8,358 2,100

Earnings before income taxes 60,912 73,068 63,049

Provision for income taxes 16,974 20,005 9,892

Net earnings $43,938 $53,063 $53,157

Net earnings $43,938 $53,063 $53,157

Other comprehensive earnings (loss) (8,740 ) 1,183 2,845

Comprehensive earnings $35,198 $54,246 $56,002

Retained earnings at beginning of year. $135,866 $147,687 $144,949

Net earnings 43,938 53,063 53,157

Cash dividends (18,360 ) (18,078 ) (17,790 )

Stock dividends (47,175 ) (46,806 ) (32,629 )

Retained earnings at end of year $114,269 $135,866 $147,687

Earnings per share $0.76 $0.90 $0.89

Average Common and Class B Common shares outstanding 57,892 58,685 59,425

(The accompanying notes are an integral part of these statements.)

CONSOLIDATED STATEMENTS OF

Financial Position

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data)

Assets December 31,

2011 2010

CURRENT ASSETS:

Cash and cash equivalents $78,612 $115,976

Investments 10,895 7,996

Accounts receivable trade, less allowances of $1,731 and $1,531 41,895 37,394

Other receivables 3,391 9,961

Inventories:

Finished goods and work-in-process 42,676 35,416

Raw materials and supplies 29,084 21,236

Prepaid expenses 5,070 6,499

Deferred income taxes 578 689

Total current assets 212,201 235,167

PROPERTY, PLANT AND EQUIPMENT, at cost:

Land 21,939 21,696

Buildings 107,567 102,934

Machinery and equipment 322,993 307,178

Construction in progress 2,598 9,243

455,097 440,974

Less—Accumulated depreciation 242,935 225,482

Net property, plant and equipment 212,162 215,492

OTHER ASSETS:

Goodwill 73,237 73,237

Trademarks 175,024 175,024

Investments 96,161 64,461

Split dollar officer life insurance 74,209 74,441

Prepaid expenses 3,212 6,680

Equity method investment 3,935 4,254

Deferred income taxes 7,715 9,203

Total other assets 433,493 407,300

Total assets $857,856 $857,959

Liabilities and Shareholders’ Equity December 31,

2011 2010

CURRENT LIABILITIES:

Accounts payable $10,683 $9,791

Dividends payable 4,603 4,529

Accrued liabilities 43,069 44,185

Total current liabilities 58,355 58,505

NONCURRENT LIABILITES:

Deferred income taxes 43,521 47,865

Postretirement health care and life insurance benefits 26,108 20,689

Industrial development bonds 7,500 7,500

Liability for uncertain tax positions 8,345 9,835

Deferred compensation and other liabilities 48,092 46,157

Total noncurrent liabilities 133,566 132,046

SHAREHOLDERS’ EQUITY:

Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issued 25,333 25,040

Class B common stock, $.69-4/9 par value—40,000 shares authorized—21,025 and 20,466 respectively, issued 14,601 14,212

Capital in excess of par value 533,677 505,495

Retained earnings, per accompanying statement 114,269 135,866

Accumulated other comprehensive loss (19,953 ) (11,213 )

Treasury stock (at cost)—71 shares and 69 shares, respectively (1,992 ) (1,992 )

Total shareholders’ equity 665,935 667,408

Total liabilities and shareholders’ equity $857,856 $857,959

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

Cash Flows (in thousands)

For the year ended December 31,

2011 2010 2009

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings $43,938 $53,063 $53,157

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation 19,229 18,279 17,862

Impairment charges — — 14,000

Impairment of equity method investment — — 4,400

Loss from equity method investment 194 342 233

Amortization of marketable security premiums 1,267 522 320

Changes in operating assets and liabilities:

Accounts receivable (5,448 ) 717 (5,899 )

Other receivables 3,963 (2,373 ) (2,088 )

Inventories (15,631 ) (1,447 ) 455

Prepaid expenses and other assets 5,106 4,936 5,203

Accounts payable and accrued liabilities 84 2,180 (2,755 )

Income taxes payable and deferred (5,772 ) 2,322 (12,543 )

Postretirement health care and life insurance benefits 2,022 1,429 1,384

Deferred compensation and other liabilities 2,146 2,525 2,960

Others (708 ) 310 305

Net cash provided by operating activities 50,390 82,805 76,994

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (16,351 ) (12,813 ) (20,831 )

Net purchase of trading securities (3,234 ) (2,902 ) (1,713 )

Purchase of available for sale securities (39,252 ) (9,301 ) (11,331 )

Sale and maturity of available for sale securities 7,680 8,208 17,511

Net cash used in investing activities (51,157 ) (16,808 ) (16,364 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Shares repurchased and retired (18,190 ) (22,881 ) (20,723 )

Dividends paid in cash (18,407 ) (18,130 ) (17,825 )

Net cash used in financing activities (36,597 ) (41,011 ) (38,548 )

Increase (decrease) in cash and cash equivalents (37,364 ) 24,986 22,082

Cash and cash equivalents at beginning of year 115,976 90,990 68,908

Cash and cash equivalents at end of year $78,612 $115,976 $90,990

Supplemental cash flow information

Income taxes paid $16,906 $20,586 $22,364

Interest paid $38 $49 $182

Stock dividend issued $47,053 $46,683 $32,538

(The accompanying notes are an integral part of these statements.)

Answer the following questions.

What is the par or stated value per share of Tootsie Roll’s common stock? (Round answer to 4 decimal places, e.g. 1.2531.)

Par or stated value per share $

The common stock has a par value of $0.69-4/9 or $0.6944 per share.

What percentage of Tootsie Roll’s authorized common stock was issued at December 31, 2011?(Round to 0 decimal places, e.g. 17%)

Percentage of common stock issued %

There are 160 million shares authorized (120 million class A and 40 million class B) of which 57,504,000 (36,479,000 + 21,025,000) are issued. The percentage is 36% (57,504,000 ÷ 160,000,000).

How many shares of common stock were outstanding at December 31, 2010, and at December 31, 2011? (Enter the answers in thousands.)

2011 2010

Number of shares outstanding

Calculate the payout ratio, earnings per share, and return on common stockholders’ equity for 2011. (Round earnings per share to 2 decimal places, e.g. 15.12 and all other answers to 1 decimal places, e.g. 12.5%.)

Broadening Your Perspective 11-2

The financial statements of The Hershey Company and Tootsie Roll are presented below.

THE HERSHEY COMPANY

CONSOLIDATED STATEMENTS OF INCOME

For the years ended December 31, 2011 2010 2009

In thousands of dollars except per share amounts

Net Sales $6,080,788 $5,671,009 $5,298,668

Costs and Expenses:

Cost of sales 3,548,896 3,255,801 3,245,531

Selling, marketing and administrative 1,477,750 1,426,477 1,208,672

Business realignment and impairment (credits) charges, net (886 ) 83,433 82,875

Total costs and expenses 5,025,760 4,765,711 4,537,078

Income before Interest and Income Taxes 1,055,028 905,298 761,590

Interest expense, net 92,183 96,434 90,459

Income before Income Taxes 962,845 808,864 671,131

Provision for income taxes 333,883 299,065 235,137

Net Income $628,962 $509,799 $435,994

Net Income Per Share—Basic—Class B Common Stock $2.58 $2.08 $1.77

Net Income Per Share—Diluted—Class B Common Stock $2.56 $2.07 $1.77

Net Income Per Share—Basic—Common Stock $2.85 $2.29 $1.97

Net Income Per Share—Diluted—Common Stock $2.74 $2.21 $1.90

Cash Dividends Paid Per Share:

Common Stock $1.3800 $1.2800 $1.1900

Class B Common Stock 1.2500 1.1600 1.0712

The notes to consolidated financial statements are an integral part of these statements and are included in the Hershey’s 2011 Annual Report, available at www.thehersheycompany.com.

THE HERSHEY COMPANY

CONSOLIDATED BALANCE SHEETS

December 31, 2011 2010

In thousands of dollars

ASSETS

Current Assets:

Cash and cash equivalents $693,686 $884,642

Accounts receivable—trade 399,499 390,061

Inventories 648,953 533,622

Deferred income taxes 136,861 55,760

Prepaid expenses and other 167,559 141,132

Total current assets 2,046,558 2,005,217

Property, Plant and Equipment, Net 1,559,717 1,437,702

Goodwill 516,745 524,134

Other Intangibles 111,913 123,080

Deferred Income Taxes 38,544 21,387

Other Assets 138,722 161,212

Total assets $4,412,199 $4,272,732

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable $420,017 $410,655

Accrued liabilities 612,186 593,308

Accrued income taxes 1,899 9,402

Short-term debt 42,080 24,088

Current portion of long-term debt 97,593 261,392

Total current liabilities 1,173,775 1,298,845

Long-term Debt 1,748,500 1,541,825

Other Long-term Liabilities 617,276 494,461

Total liabilities 3,539,551 3,335,131

Commitments and Contingencies — —

Stockholders’ Equity:

The Hershey Company Stockholders’ Equity

Preferred Stock, shares issued: none in 2011 and 2010 — —

Common Stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010 299,269 299,195

Class B Common Stock, shares issued: 60,632,042 in 2011 and 60,706,419 in 2010 60,632 60,706

Additional paid-in capital 490,817 434,865

Retained earnings 4,699,597 4,374,718

Treasury—Common Stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010 (4,258,962 ) (4,052,101 )

Accumulated other comprehensive loss (442,331 ) (215,067 )

The Hershey Company stockholders’ equity 849,022 902,316

Noncontrolling interests in subsidiaries 23,626 35,285

Total stockholders’ equity 872,648 937,601

Total liabilities and stockholders’equity $4,412,199 $4,272,732

THE HERSHEY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2011 2010 2009

In thousands of dollars

Cash Flows Provided from (Used by) Operating Activities

Net income $628,962 $509,799 $435,994

Adjustments to reconcile net income to net cash provided from operations:

Depreciation and amortization 215,763 197,116 182,411

Stock-based compensation expense, net of tax of $15,127, $17,413 and $19,223, respectively 28,341 32,055 34,927

Excess tax benefits from stock-based compensation (13,997 ) (1,385 ) (4,455 )

Deferred income taxes 33,611 (18,654 ) (40,578 )

Gain on sale of trademark licensing rights, net of tax of $5,962 (11,072 ) — —

Business realignment and impairment charges, net of tax of $18,333, $20,635 and $38,308, respectively 30,838 77,935 60,823

Contributions to pension plans (8,861 ) (6,073 ) (54,457 )

Changes in assets and liabilities, net of effects from business acquisitions and divestitures:

Accounts receivable—trade (9,438 ) 20,329 46,584

Inventories (115,331 ) (13,910 ) 74,000

Accounts payable 7,860 90,434 37,228

Other assets and liabilities (205,809 ) 13,777 293,272

Net Cash Provided from Operating Activities 580,867 901,423 1,065,749

Cash Flows Provided from (Used by) Investing Activities

Capital additions (323,961 ) (179,538 ) (126,324 )

Capitalized software additions (23,606 ) (21,949 ) (19,146 )

Proceeds from sales of property, plant and equipment 312 2,201 10,364

Proceeds from sales of trademark licensing rights 20,000 — —

Business acquisitions (5,750 ) — (15,220 )

Net Cash (Used by) Investing Activities (333,005 ) (199,286 ) (150,326 )

Cash Flows Provided from (Used by) Financing Activities

Net change in short-term borrowings 10,834 1,156 (458,047 )

Long-term borrowings 249,126 348,208 —

Repayment of long-term debt (256,189 ) (71,548 ) (8,252 )

Proceeds from lease financing agreement 47,601 — —

Cash dividends paid (304,083 ) (283,434 ) (263,403 )

Exercise of stock options 184,411 92,033 28,318

Excess tax benefits from stock-based compensation 13,997 1,385 4,455

Contributions from noncontrolling interests in subsidiaries — 10,199 7,322

Repurchase of Common Stock (384,515 ) (169,099 ) (9,314 )

Net Cash (Used by) Financing Activities (438,818 ) (71,100 ) (698,921 )

(Decrease) Increase in Cash and Cash Equivalents (190,956 ) 631,037 216,502

Cash and Cash Equivalents as of January 1 884,642 253,605 37,103

Cash and Cash Equivalents as of December 31 $693,686 $884,642 $253,605

Interest Paid $97,892 $97,932 $91,623

Income Taxes Paid 292,315 350,948 252,230

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)

For the year ended December 31,

2011 2010 2009

Net product sales $528,369 $517,149 $495,592

Rental and royalty revenue 4,136 4,299 3,739

Total revenue 532,505 521,448 499,331

Product cost of goods sold 365,225 349,334 319,775

Rental and royalty cost 1,038 1,088 852

Total costs 366,263 350,422 320,627

Product gross margin 163,144 167,815 175,817

Rental and royalty gross margin 3,098 3,211 2,887

Total gross margin 166,242 171,026 178,704

Selling, marketing and administrative expenses 108,276 106,316 103,755

Impairment charges — — 14,000

Earnings from operations 57,966 64,710 60,949

Other income (expense), net 2,946 8,358 2,100

Earnings before income taxes 60,912 73,068 63,049

Provision for income taxes 16,974 20,005 9,892

Net earnings $43,938 $53,063 $53,157

Net earnings $43,938 $53,063 $53,157

Other comprehensive earnings (loss) (8,740 ) 1,183 2,845

Comprehensive earnings $35,198 $54,246 $56,002

Retained earnings at beginning of year. $135,866 $147,687 $144,949

Net earnings 43,938 53,063 53,157

Cash dividends (18,360 ) (18,078 ) (17,790 )

Stock dividends (47,175 ) (46,806 ) (32,629 )

Retained earnings at end of year $114,269 $135,866 $147,687

Earnings per share $0.76 $0.90 $0.89

Average Common and Class B Common shares outstanding 57,892 58,685 59,425

(The accompanying notes are an integral part of these statements.)

CONSOLIDATED STATEMENTS OF

Financial Position

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data)

Assets December 31,

2011 2010

CURRENT ASSETS:

Cash and cash equivalents $78,612 $115,976

Investments 10,895 7,996

Accounts receivable trade, less allowances of $1,731 and $1,531 41,895 37,394

Other receivables 3,391 9,961

Inventories:

Finished goods and work-in-process 42,676 35,416

Raw materials and supplies 29,084 21,236

Prepaid expenses 5,070 6,499

Deferred income taxes 578 689

Total current assets 212,201 235,167

PROPERTY, PLANT AND EQUIPMENT, at cost:

Land 21,939 21,696

Buildings 107,567 102,934

Machinery and equipment 322,993 307,178

Construction in progress 2,598 9,243

455,097 440,974

Less—Accumulated depreciation 242,935 225,482

Net property, plant and equipment 212,162 215,492

OTHER ASSETS:

Goodwill 73,237 73,237

Trademarks 175,024 175,024

Investments 96,161 64,461

Split dollar officer life insurance 74,209 74,441

Prepaid expenses 3,212 6,680

Equity method investment 3,935 4,254

Deferred income taxes 7,715 9,203

Total other assets 433,493 407,300

Total assets $857,856 $857,959

Liabilities and Shareholders’ Equity December 31,

2011 2010

CURRENT LIABILITIES:

Accounts payable $10,683 $9,791

Dividends payable 4,603 4,529

Accrued liabilities 43,069 44,185

Total current liabilities 58,355 58,505

NONCURRENT LIABILITES:

Deferred income taxes 43,521 47,865

Postretirement health care and life insurance benefits 26,108 20,689

Industrial development bonds 7,500 7,500

Liability for uncertain tax positions 8,345 9,835

Deferred compensation and other liabilities 48,092 46,157

Total noncurrent liabilities 133,566 132,046

SHAREHOLDERS’ EQUITY:

Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issued 25,333 25,040

Class B common stock, $.69-4/9 par value—40,000 shares authorized—21,025 and 20,466 respectively, issued 14,601 14,212

Capital in excess of par value 533,677 505,495

Retained earnings, per accompanying statement 114,269 135,866

Accumulated other comprehensive loss (19,953 ) (11,213 )

Treasury stock (at cost)—71 shares and 69 shares, respectively (1,992 ) (1,992 )

Total shareholders’ equity 665,935 667,408

Total liabilities and shareholders’ equity $857,856 $857,959

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

Cash Flows (in thousands)

For the year ended December 31,

2011 2010 2009

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings $43,938 $53,063 $53,157

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation 19,229 18,279 17,862

Impairment charges — — 14,000

Impairment of equity method investment — — 4,400

Loss from equity method investment 194 342 233

Amortization of marketable security premiums 1,267 522 320

Changes in operating assets and liabilities:

Accounts receivable (5,448 ) 717 (5,899 )

Other receivables 3,963 (2,373 ) (2,088 )

Inventories (15,631 ) (1,447 ) 455

Prepaid expenses and other assets 5,106 4,936 5,203

Accounts payable and accrued liabilities 84 2,180 (2,755 )

Income taxes payable and deferred (5,772 ) 2,322 (12,543 )

Postretirement health care and life insurance benefits 2,022 1,429 1,384

Deferred compensation and other liabilities 2,146 2,525 2,960

Others (708 ) 310 305

Net cash provided by operating activities 50,390 82,805 76,994

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (16,351 ) (12,813 ) (20,831 )

Net purchase of trading securities (3,234 ) (2,902 ) (1,713 )

Purchase of available for sale securities (39,252 ) (9,301 ) (11,331 )

Sale and maturity of available for sale securities 7,680 8,208 17,511

Net cash used in investing activities (51,157 ) (16,808 ) (16,364 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Shares repurchased and retired (18,190 ) (22,881 ) (20,723 )

Dividends paid in cash (18,407 ) (18,130 ) (17,825 )

Net cash used in financing activities (36,597 ) (41,011 ) (38,548 )

Increase (decrease) in cash and cash equivalents (37,364 ) 24,986 22,082

Cash and cash equivalents at beginning of year 115,976 90,990 68,908

Cash and cash equivalents at end of year $78,612 $115,976 $90,990

Supplemental cash flow information

Income taxes paid $16,906 $20,586 $22,364

Interest paid $38 $49 $182

Stock dividend issued $47,053 $46,683 $32,538

(The accompanying notes are an integral part of these statements.)

Based on the information in these financial statements, compute the 2011 return on common stockholders’ equity, debt to assets ratio, and return on assets for each company. (Round answers to 1 decimal places, e.g. 15.2%.)

Compute the payout ratio for each company. Which pays out a higher percentage of its earnings? (Round answers to 1 decimal places, e.g. 15.2%.)

Hershey Company Tootsie Roll

Payout ratio

%

%

Which pays out a higher percentage of its earnings?

pays out a higher percentage of its earnings.

Problem 11-5A

Pringle Corporation has been authorized to issue 22,900 shares of $100 par value, 8%, noncumulative preferred stock and 1,162,100 shares of no-par common stock.

The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders’ equity.

Preferred Stock $152,900

Paid-in Capital in Excess of Par Value—Preferred Stock 20,340

Common Stock 2,270,000

Paid-in Capital in Excess of Stated Value—Common Stock 1,617,000

Treasury Stock— (5,480 common shares) 65,760

Retained Earnings 82,300

The preferred stock was issued for $173,240 cash. All common stock issued was for cash. In November 5,480 shares of common stock were purchased for the treasury at a per share cost of $12. No dividends were declared in 2014.

Your answer is correct.

Prepare the journal entries for the following. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1) Issuance of preferred stock for cash.

(2) Issuance of common stock for cash.

(3) Purchase of common treasury stock for cash.

Problem 11-8A

On January 1, 2014, Everett Corporation had these stockholders’ equity accounts.

Common Stock ($10 par value, 69,700 shares issued and outstanding) $697,000

Paid-in Capital in Excess of Par Value 484,300

Retained Earnings 684,900

During the year, the following transactions occurred.

Jan. 15 Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15.

Feb. 15 Paid the dividend declared in January.

Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $13 per share.

May 15 Issued the shares for the stock dividend.

Dec. 1 Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2015.

Dec. 31 Determined that net income for the year was $401,800.