International Champions Corporation has the following capital structure at the beginning of the year:
5% Preferred stock, $50 par value, 20,000 shares authorized,
6,000 shares issued and outstanding $ 300,000
Common stock, $10 par value, 60,000 shares authorized,
40,000 shares issued and outstanding 400,000
Paid-in capital in excess of par 110,000
Total paid-in capital 810,000
Retained earnings 940,000
Total stockholders' equity $1,750,000
Instructions
(a) Record the following transactions which occurred consecutively (show all calculations).
1. A total cash dividend of $100,000 was declared and payable to stockholders of record.
Record dividends payable on common and preferred stock in separate accounts.
2. A 10% common stock dividend was declared. The average fair value of the common
stock is $25 a share.
3. International Champions Corporation owned 30,000 shares of Celtics Corporation. These shares were
purchased in 2019 for $900,000. On June 16, 2022, Warrior declared a property dividend out of Celtics
Investments. On that date, the market price of Celtics stocks was $20 per share.
4. Purchased 500 shares of capital stock to be held as treasury stock, paying $40 per share.
(b) Construct the stockholders' equity section incorporating all the above information.