P12-4A On January 1, 2008, Galactica Corporation had the following stockholders’ equity accounts-ANSWER KEY

P12-4A On January 1, 2008, Galactica Corporation had the following stockholders’ equity accounts.

Common Stock ($20 par value, 60,000 shares issued and outstanding) $1,200,000Paid-in Capital in Excess of Par Value 200,000

Retained Earnings 500,000

During the year, the following transactions occurred.

Feb. 1 Declared a $1 cash dividend per share to stockholders of record on February 15,

payable March 1.

Mar. 1 Paid the dividend declared in February.

Apr. 1 Announced a 5-for-1 stock split. Prior to the split, the market price per share was $35.

July 1 Declared a 5% stock dividend to stockholders of record on July 15, distributable July

31. On July 1, the market price of the stock was $7 per share.

July 31 Issued the shares for the stock dividend.

Dec. 1 Declared a $0.50 per share dividend to stockholders of record on December 15,

payable January 5, 2009.

31 Determined that net income for the year was $380,000.

Instructions

(a) Journalize the transactions and closing entries.

(b) Enter the beginning balances and post the entries to the stockholders’ equity accounts.

(Note: Open additional stockholders’ equity accounts as needed.)

(c) Prepare a stockholders’ equity section at December 31.

Here's the SOLUTION