Velvet Inc. had the following stockholders’ equity account balances at December 31,2006: Preferred Stock P1,800,000 Additional paid in capital from preferred stock 90,000 Common stock 5,150,000 Additional paid inc capital from common stock 3,500,000 Retained earnings 4,000,000 Net unrealized loss on Available for sale securities 245,000 Treasury common stock 270,000 Velvet’s preferred and common shares are traded on the over-the-counter market. At December 31,2006, Velvet had 100,000 authorized shares of P100 par, 10% cumulative preferred stock and 3,000,000 authorized share of no par common with a stated value of P5 per share. Transactions during 2007 and other information relating to the stockholders’ equity accounts were as follows: a). On January 10,2007, Velvet formally retired all the 30,000 shares of its treasury common stock and had them revert to unissued basis. The treasury stock had been acquired on January 20,2005. The shares were originally issued at P10 per share. b). Velvet owned 10,000 shares of Star Inc. common stock purchased on 2006 for P750,000. The Star stock was included in Velvet’s trading securities portfolio. On February 15,2007, Velvet declared a dividend in kind of one share of Star for every hundred shares of Velvet common stock held by stockholders of record on February 28,2007. The dividend in kind was distributed on March 12,2006. What are the journal entries for the above transactions?
Velvet Inc. had the following
Additional paid in capital from preferred stock 90,000
Common stock 5,150,000
Additional paid inc capital from common stock 3,500,000
Net unrealized loss on Available for sale securities 245,000
Treasury common stock 270,000
Velvet’s preferred and common shares are traded on the over-the-counter market. At December 31,2006, Velvet had 100,000 authorized shares of P100 par, 10% cumulative preferred stock and 3,000,000 authorized share of no par common with a stated value of P5 per share.
Transactions during 2007 and other information relating to the stockholders’ equity accounts were as follows:
a). On January 10,2007, Velvet formally retired all the 30,000 shares of its treasury common stock and had them revert to unissued basis. The
b). Velvet owned 10,000 shares of Star Inc. common stock purchased on 2006 for P750,000. The Star stock was included in Velvet’s trading securities portfolio. On February 15,2007, Velvet declared a dividend in kind of one share of Star for every hundred shares of Velvet common stock held by stockholders of record on February 28,2007. The dividend in kind was distributed on March 12,2006.
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