Accounting Promblem

Part I:

Delaware Corporation has the following stockholders' equity accounts at December 31, 20X2.

Common Stock ($1 par value, authorized 8,000 shares) $4,800

Retained Earnings $294,000

Instructions:

(a) Prepare journal entries to record the following transactions, which took place during 20X3.

1. 280 shares of outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost method.)

2. A $20 per share cash dividend was declared.

3. The dividend declared in (2) above was paid.

4. The treasury shares purchased in (1) above were resold at $102 per share.

5. 500 shares of outstanding stock were purchased at $105 per share.

6. 350 of the shares purchased in (5) above were resold at $96 per share.

(b) Prepare the stockholders' equity section of Delaware Corporation's balance sheet after giving effects to these transactions, assuming that the net income is $94,000.

Part II:

Taylor Company paid cash dividends totaling $150,000 in 20X2 and $75,000 in 20X3. In 20X4, Taylor intends to pay cash dividends of $800,000. Compute the amount of cash dividends per share to be received by common stockholders in 20X4 under each of the following assumptions. Treat each case independently. There were no dividends in arrears as of January 1, 20X2.