Financial Accounting: An Integrated Statements Approach, 2nd Edition

Health Co. is an HMO for 12 businesses in the Chicago area. The following account balances ap-

pear on the balance sheet of Health Co.: Common stock (250,000 shares authorized), $100 par,

$12,500,000; Paid-in capital in excess of par—common stock, $750,000; and Retained earnings,

$30,578,000. The board of directors declared a 2% stock dividend when the market price of the

stock was $110 per share. Health Co, reported no income or loss for the current year.

a. Journalize the entries for (1) the declaration of the dividend, capitalizing an amount equal

to market value, and (2) the issuance of the stock certificates.

b. Determine the following amounts before the stock dividend was declared: (1) total paid-in

capital, (2) total retained earnings, and (3) total stockholders’ equity.

c. Determine the following amounts after the stock dividend was declared and closing en-

tries were recorded at the end of the year: (1) total paid-in capital, (2) total retained earn-

ings, and (3) total stockholders’ equity.

Selected transactions completed by Indy Boating Supply Corporation during the current fiscal

year are as follows:

Feb. 9 Split the common stock 3 for 1 and reduced the par from $120 to $40 per share. After

the split, there were 900,000 common shares outstanding.

Apr. 10 Declared semiannual dividends of $1 on 12,000 shares of preferred stock and $0.05 on

the common stock to stockholders of record on April 20, payable on May 1.

May 1 Paid the cash dividends.

Oct. 12 Declared semiannual dividends of $1 on the preferred stock and $0.15 on the common

stock (before the stock dividend). In addition, a 1% common stock dividend was declared

on the common stock outstanding. The fair market value of the common stock is

estimated at $48.

Nov. 14 Paid the cash dividends and issued the certificates for the common stock dividend.

Journalize the transactions.

A recent statement of comprehensive income for Caterpillar, Inc., was disclosed as follows (all

amounts in millions):

520 Chapter 11 Stockholders’ Equity: Capital Stock and Dividends

Exercise 11-18

Entries for stock dividends

Goal 7

b. (1) $13,250,000

(3) $43,828,000

Exercise 11-19

Selected stock and dividend

transactions

Goals5, 7

Exercise 11-20

Other comprehensive

income

Goal 8

The balance sheet dated December 31, 2003, showed a retained earnings balance of $8,450

and an accumulated other comprehensive loss of $517. The company declared $548 in dividends

during the fiscal year.

a. What is the total other comprehensive income or loss for Caterpillar for the fiscal year

ended December 31, 2004?

b. What percent of total comprehensive income consists of other comprehensive income items?

Round percent to one decimal place.

c. What was the December 31, 2004, balance of (1) Retained Earnings and (2) Accumulated

Other Comprehensive Loss?

Net earnings $ 2,035

Other comprehensive income:

Foreign currency translation 141

Pension adjustment (59)

Unrealized gains on investments 11

Total comprehensive income $ 2,128

Caterpillar, Inc.

Statement of Comprehensive Income

December 31, 2004