On January 1, 2014, Geffrey Corporation had significant stockholders' equity and declared multiple dividends and stock splits throughout the year, resulting in various journal entries. Key transactions included a $1 cash dividend, a 2-for-1 stock split, and a 10% stock dividend, impacting the number of shares and retained earnings. The year concluded with a net income of $350,000, requiring closing entries for income and dividends.

1. Problem 14-1A On January 1, 2014, Geffrey Corporation had the following stockholders'
equity accounts Common Stock ($20 par value, 60,000 shares issued and outstanding) Paid-in
Capital in Excess of Par-Common Stock Retained Earnings $1,200,000 200,000 600,000 During
the year, the following transactions occurred. Declared a $1 cash dividend per share to
stockholders of record on February 15, payable March 1 Paid the dividend declared in February
Announced a 2-for-1 stock split. Prior to the split, the market price per share was $36 Declared a
10% stock dividend to stockholders of record on July 15, distributable July 31, On July 1, the
market price of the stock was $13 per share Issued the shares for the stock dividend Declared a
$0.50 per share dividend to stockholders of record on December 15, payable January 5, 2015
Determined that net income for the year was $350,000 Feb. 1 Mar. 1 Apr. 1 July 1 31 Dec. 1 31
Journalize the transactions and the closing entries for net income and dividends. (Credit account
titles are automatically indented when amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter 0 for the amounts. If no entry is
required, select "No entry" for the account titles and enter 0 for the amounts.) Date Aocount
Titles and Explanation Debit Credit Feb. 1 Mar. 1 Apr. 1 July 1 uly 31 Dec. 1 Dec. 31 (To close
net income) (To close stock dividends) (To close cash dividends)
Solution
Journal Entries:
Date
Accounts / Explanations
Debit
Credit
Feb. 1
Cash Dividend
$ 60,000.00
Dividend Payable
$ 60,000.00
(Being cash dividend declared = 60000 Shares * $1)
Mar. 1
Dividend Payable
$ 60,000.00
Cash
$ 60,000.00
(Being cash dividend cash )

2. Apr. 1
No entry
(New shares = 60000*2 = 120000 Shares @ $20/ 2 =$10 Par value)
July. 1
Stock Dividend
$ 156,000.00
Dividend Distributable
$ 156,000.00
(Being Stock Dividend Declared = 120000 *10% = 12000 Shares*$13 )
July. 31
Dividend Distributable
$ 156,000.00
Paid in capital in excess of par- Common Stock (156000-120000)
$ 36,000.00
Common Stock (12000 Shares * $10)
$ 120,000.00
(Being shares issues for dividend )
Note : total number of shares after Stock Div = 120000+12000 = 132000
Dec. 1
Cash Dividend
$ 66,000.00
Dividend Payable
$ 66,000.00
(Being cash dividend declared = 132000 Shares * $0.50)
Dec. 31
Income Summary
$ 350,000.00
Retained earnings
$ 350,000.00
(Being net income closed)
Retained earnings
$ 126,000.00
Cash Dividend (60000+66000)
$ 126,000.00
(Being cash dividend closed)
Retained earnings

3. $ 156,000.00
Stock Dividend
$ 156,000.00
(Being cash dividend closed)
Journal Entries:
Date
Accounts / Explanations
Debit
Credit
Feb. 1
Cash Dividend
$ 60,000.00
Dividend Payable
$ 60,000.00
(Being cash dividend declared = 60000 Shares * $1)
Mar. 1
Dividend Payable
$ 60,000.00
Cash
$ 60,000.00
(Being cash dividend cash )
Apr. 1
No entry
(New shares = 60000*2 = 120000 Shares @ $20/ 2 =$10 Par value)
July. 1
Stock Dividend
$ 156,000.00
Dividend Distributable
$ 156,000.00
(Being Stock Dividend Declared = 120000 *10% = 12000 Shares*$13 )
July. 31
Dividend Distributable
$ 156,000.00
Paid in capital in excess of par- Common Stock (156000-120000)
$ 36,000.00
Common Stock (12000 Shares * $10)

4. $ 120,000.00
(Being shares issues for dividend )
Note : total number of shares after Stock Div = 120000+12000 = 132000
Dec. 1
Cash Dividend
$ 66,000.00
Dividend Payable
$ 66,000.00
(Being cash dividend declared = 132000 Shares * $0.50)
Dec. 31
Income Summary
$ 350,000.00
Retained earnings
$ 350,000.00
(Being net income closed)
Retained earnings
$ 126,000.00
Cash Dividend (60000+66000)
$ 126,000.00
(Being cash dividend closed)
Retained earnings
$ 156,000.00
Stock Dividend
$ 156,000.00
(Being cash dividend closed)