Stockholder's Equity

Question 1

Issuance of common stock at par value

Answer 1

Dr. Cash
Cr. Common Stock

Question 2

Issuance of preferred stock above par value

Answer 2

Dr. Cash
Cr. Preferred Stock
Cr. Additional Paid-in Capital - Preferred Stock

Question 3

Declaration of cash dividends on common stock

Answer 3

Dr. Retained Earnings
Cr. Dividends Payable

Question 4

Payment of previously declared cash dividends

Answer 4

Dr. Dividends Payable
Cr. Cash

Question 5

Stock split (2-for-1)

Answer 5

Dr. Common Stock
Cr. Additional Paid-in Capital

Question 6

Treasury stock purchase

Answer 6

Dr. Treasury Stock
Cr. Cash

Question 7

Retirement of treasury stock (cost method)

Answer 7

Dr. Common Stock
Dr. Additional Paid-in Capital
Dr. Retained Earnings
Cr. Treasury Stock

Question 8

Stock dividend distribution (small stock dividend)

Answer 8

Dr. Retained Earnings
Cr. Common Stock Dividends Distributable
Cr. Additional Paid-in Capital

Question 9

Appropriation of retained earnings for contingencies

Answer 9

Dr. Retained Earnings
Cr. Appropriated Retained Earnings - Contingencies

Question 10

Reversal of previously appropriated retained earnings

Answer 10

Dr. Appropriated Retained Earnings - Contingencies
Cr. Retained Earnings