On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.
Instructions
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and book value per share. Use the following column headings:
Before Action, After Stock Dividend, and After Stock Split.
Click here for the solution: On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000
Showing posts with label Section. Show all posts
Showing posts with label Section. Show all posts
Thursday, January 14, 2016
Monday, October 5, 2015
Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009
P10-2 (Classification of Acquisition Costs) Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009, had the following balances.
Land $ 300,000
Land improvements 140,000
Buildings 1,100,000
Machinery and equipment 960,000
During 2010 the following transactions occurred.
1. A tract of land was acquired for $150,000 as a potential future building site.
2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobo’s common stock. On the acquisition date, Lobo’s stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota’s books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000.
3. Items of machinery and equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows.
Freight and unloading $13,000
Sales taxes 20,000
Installation 26,000
4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years.
5. A machine costing $80,000 on January 1, 2002, was scrapped on June 30, 2010. Double-declining balance depreciation has been recorded on the basis of a 10-year life.
6. A machine was sold for $20,000 on July 1, 2010. Original cost of the machine was $44,000 on January 1, 2007, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,000.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land
Land improvements
Buildings
Machinery and equipment
(Hint: Disregard the related accumulated depreciation accounts.)
(b) List the items in the fact situation that were not used to determine the answer to (a), showing the pertinent amounts and supporting computations in good form for each item. In addition, indicate where, or if, these items should be included in Lobo’s financial statements.
(AICPA adapted)
Click here for the solution: Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009
Land $ 300,000
Land improvements 140,000
Buildings 1,100,000
Machinery and equipment 960,000
During 2010 the following transactions occurred.
1. A tract of land was acquired for $150,000 as a potential future building site.
2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobo’s common stock. On the acquisition date, Lobo’s stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota’s books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000.
3. Items of machinery and equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows.
Freight and unloading $13,000
Sales taxes 20,000
Installation 26,000
4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years.
5. A machine costing $80,000 on January 1, 2002, was scrapped on June 30, 2010. Double-declining balance depreciation has been recorded on the basis of a 10-year life.
6. A machine was sold for $20,000 on July 1, 2010. Original cost of the machine was $44,000 on January 1, 2007, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,000.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land
Land improvements
Buildings
Machinery and equipment
(Hint: Disregard the related accumulated depreciation accounts.)
(b) List the items in the fact situation that were not used to determine the answer to (a), showing the pertinent amounts and supporting computations in good form for each item. In addition, indicate where, or if, these items should be included in Lobo’s financial statements.
(AICPA adapted)
Click here for the solution: Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009
Sunday, September 27, 2015
At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet
P10-1 (Classification of Acquisition and Other Asset Costs) At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the following balances.
Land $230,000
Buildings 890,000
Leasehold improvements 660,000
Machinery and equipment 875,000
During 2010 the following transactions occurred.
1. Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000.
2. A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the following costs.
Excavation fees $38,000
Architectural design fees 11,000
Building permit fee 2,500
Imputed interest on funds used during construction (stock financing) 8,500
The building was completed and occupied on September 30, 2010.
3. A third tract of land (site number 623) was acquired for $650,000 and was put on the market for resale.
4. During December 2010 costs of $89,000 were incurred to improve leased office space. The related lease will terminate on December 31, 2012, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)
5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $87,000, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2010 were $17,500.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land Leasehold improvements
Buildings Machinery and equipment
Disregard the related accumulated depreciation accounts.
(b) List the items in the situation that were not used to determine the answer to (a) above, and indicate where, or if, these items should be included in Reagan's financial statements.
Click here for the solution: At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet
Land $230,000
Buildings 890,000
Leasehold improvements 660,000
Machinery and equipment 875,000
During 2010 the following transactions occurred.
1. Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000.
2. A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the following costs.
Excavation fees $38,000
Architectural design fees 11,000
Building permit fee 2,500
Imputed interest on funds used during construction (stock financing) 8,500
The building was completed and occupied on September 30, 2010.
3. A third tract of land (site number 623) was acquired for $650,000 and was put on the market for resale.
4. During December 2010 costs of $89,000 were incurred to improve leased office space. The related lease will terminate on December 31, 2012, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)
5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $87,000, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2010 were $17,500.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land Leasehold improvements
Buildings Machinery and equipment
Disregard the related accumulated depreciation accounts.
(b) List the items in the situation that were not used to determine the answer to (a) above, and indicate where, or if, these items should be included in Reagan's financial statements.
Click here for the solution: At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet
Sunday, September 20, 2015
The intangible assets section of Time Company at December 31, 2011, is presented below
ACC 291 Week 2 Assignment
P9-7B The intangible assets section of Time Company at December 31, 2011, is presented below.
Patent ($100,000 cost less $10,000 amortization) $ 90,000
Copyright ($60,000 cost less $24,000 amortization) 36,000
Total $126,000
The patent was acquired in January 2011 and has a useful life of 10 years. The copyright was acquired in January 2008 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2012.
Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company.
Jan.–June Developed a new product, incurring $230,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.
Sept. 1 Paid $125,000 to an Xgames star to appear in commercials advertising the company’s products. The commercials will air in September and October
Oct. 1 Acquired a copyright for $200,000. The copyright has a useful life of 50 years.
Instructions
(a) Prepare journal entries to record the transactions above.
(b) Prepare journal entries to record the 2012 amortization expense for intangible assets.
(b) Amortization Expense—Patents $15,000;
Amortization Expense—Copyrights $7,000
(c) Prepare the intangible assets section of the balance sheet at December 31, 2012.
(c) Total intangible assets, $349,000
(d) Prepare the note to the financials on Time’s intangibles as of December 31, 2012.
Click here for the solution: The intangible assets section of Time Company at December 31, 2011, is presented below
P9-7B The intangible assets section of Time Company at December 31, 2011, is presented below.
Patent ($100,000 cost less $10,000 amortization) $ 90,000
Copyright ($60,000 cost less $24,000 amortization) 36,000
Total $126,000
The patent was acquired in January 2011 and has a useful life of 10 years. The copyright was acquired in January 2008 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2012.
Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company.
Jan.–June Developed a new product, incurring $230,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.
Sept. 1 Paid $125,000 to an Xgames star to appear in commercials advertising the company’s products. The commercials will air in September and October
Oct. 1 Acquired a copyright for $200,000. The copyright has a useful life of 50 years.
Instructions
(a) Prepare journal entries to record the transactions above.
(b) Prepare journal entries to record the 2012 amortization expense for intangible assets.
(b) Amortization Expense—Patents $15,000;
Amortization Expense—Copyrights $7,000
(c) Prepare the intangible assets section of the balance sheet at December 31, 2012.
(c) Total intangible assets, $349,000
(d) Prepare the note to the financials on Time’s intangibles as of December 31, 2012.
Click here for the solution: The intangible assets section of Time Company at December 31, 2011, is presented below
On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000
E11-15 On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.
Instructions
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and book value per share. Use the following column headings:
Before Action, After Stock Dividend, and After Stock Split.
Click here for the solution: On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000
Instructions
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and book value per share. Use the following column headings:
Before Action, After Stock Dividend, and After Stock Split.
Click here for the solution: On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000
Friday, September 18, 2015
The management discussion and Analysis section of an annual report addresses corporate performance for the year
The management discussion and Analysis section of an annual report
addresses corporate performance for the year, and sometimes uses
financial ratios to support its claims.
Address: www.ibm.com/investor/tools/index,phtml or go to www.wiley.com/college/wegandt
Steps
1. From IBM's Investor Tools, choose Investment Guides.
2. Choose Guide to Annual Reports.
3. Choose Anatomy of an Annual Report.
Instructions
Using the information from the above site, answers the following questions.
(a) What are the optional elements that are often included in an annual report?
(b) What are the elements of an annual report that are required by the SEC?
(c) Describe the contents of the Management Discussion.
(d) Describe the contents of the Auditors' Report.
(e) Describe the contents of the selected Financial Data.
Click here for the solution: The management discussion and Analysis section of an annual report addresses corporate performance for the year
Address: www.ibm.com/investor/tools/index,phtml or go to www.wiley.com/college/wegandt
Steps
1. From IBM's Investor Tools, choose Investment Guides.
2. Choose Guide to Annual Reports.
3. Choose Anatomy of an Annual Report.
Instructions
Using the information from the above site, answers the following questions.
(a) What are the optional elements that are often included in an annual report?
(b) What are the elements of an annual report that are required by the SEC?
(c) Describe the contents of the Management Discussion.
(d) Describe the contents of the Auditors' Report.
(e) Describe the contents of the selected Financial Data.
Click here for the solution: The management discussion and Analysis section of an annual report addresses corporate performance for the year
Wednesday, September 2, 2015
The stockholders' equity section of Jarvis Corporation at December 31 is as follows
The stockholders' equity section of Jarvis Corporation at December 31 is as follows.
JARVIS CORPORATION
Balance Sheet (partial)
Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued $ 300,000
and outstanding
Common stock, no par, 750,000 shares authorized, 600,000 shares issued 1,200,000
Total paid-in capital 1,500,000
Retained earnings 1,858,000
Total paid-in capital and retained earnings 3,358,000
Less: Treasury stock (10,000 common shares) (64,000)
Total stockholders' equity $3,294,000
Instructions
From a review of the stockholders’ equity section, as chief accountant, write a memo to the president of the company answering the following questions.
(a) How many shares of common stock are outstanding?
(b) Assuming there is a stated value, what is the stated value of the common stock?
(c) What is the par value of the preferred stock?
(d) If the annual dividend on preferred stock is $30,000, what is the dividend rate on preferred stock?
(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?
Click here for the solution: The stockholders' equity section of Jarvis Corporation at December 31 is as follows
JARVIS CORPORATION
Balance Sheet (partial)
Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued $ 300,000
and outstanding
Common stock, no par, 750,000 shares authorized, 600,000 shares issued 1,200,000
Total paid-in capital 1,500,000
Retained earnings 1,858,000
Total paid-in capital and retained earnings 3,358,000
Less: Treasury stock (10,000 common shares) (64,000)
Total stockholders' equity $3,294,000
Instructions
From a review of the stockholders’ equity section, as chief accountant, write a memo to the president of the company answering the following questions.
(a) How many shares of common stock are outstanding?
(b) Assuming there is a stated value, what is the stated value of the common stock?
(c) What is the par value of the preferred stock?
(d) If the annual dividend on preferred stock is $30,000, what is the dividend rate on preferred stock?
(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?
Click here for the solution: The stockholders' equity section of Jarvis Corporation at December 31 is as follows
On October 31, the stockholders’ equity section of Huth Company consists of common stock $300,000 and retained earnings $900,000
On October 31, the stockholders’ equity section of Huth Company consists of common stock $300,000 and retained earnings $900,000. Huth is considering the following two courses of action:
(1) Declaring a 5% stock dividend on the 30,000, $10 par value shares outstanding, or
(2) Effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.
Instructions
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity, outstanding shares, and par value per share. Use the following column headings: Before Action, After Stock Dividend, and After Stock Split
Click here for the solution: On October 31, the stockholders’ equity section of Huth Company consists of common stock $300,000 and retained earnings $900,000
(1) Declaring a 5% stock dividend on the 30,000, $10 par value shares outstanding, or
(2) Effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.
Instructions
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity, outstanding shares, and par value per share. Use the following column headings: Before Action, After Stock Dividend, and After Stock Split
Click here for the solution: On October 31, the stockholders’ equity section of Huth Company consists of common stock $300,000 and retained earnings $900,000
Monday, August 31, 2015
On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet
MULTIPLE CHOICE / TRUE OR FALSE
1. On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet:
Stockholders' equity
Common stock, $1 par 100,000 shares authorized $40,000
40,000 shares issued
Paid-in capital in excess of par 260,000
Retained earnings 940,000
Total stockholder's equity $1,240,000
On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, what would be the new number of shares issued shown on the balance sheet? (Points : 1)
2. Stock sold for amounts in excess of par value results in a gain reported on the income statement. (Points : 1)
3. The account to be debited when a stock dividend is declared and distributed on the same date would be: (Points : 1)
4. A corporation must record a gain on sale for the sale of treasury stock at an amount greater than its purchase price. (Points : 1)
5. If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. (Points : 1)
6. Please refer to the following information for Petra Sales Company:
Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
Paid-in capital in excess of par: $1,600,000
Retained earnings: $2,440,000
Treasury stock: 20,000 shares purchased at $12 per share
If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, the total equity of the company will go down by $70,000. (Points : 1)
7. Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. What is the total amount of dividends that will be paid to the common shareholders? (Points : 1)
8. Which of the following describes the term outstanding stock? (Points : 1)
9. A corporation is a separate legal entity formed under the laws of a particular state. (Points : 1)
10. All forms and classes of stock carry voting rights. (Points : 1)
Click here for the solution: On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet
1. On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet:
Stockholders' equity
Common stock, $1 par 100,000 shares authorized $40,000
40,000 shares issued
Paid-in capital in excess of par 260,000
Retained earnings 940,000
Total stockholder's equity $1,240,000
On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, what would be the new number of shares issued shown on the balance sheet? (Points : 1)
2. Stock sold for amounts in excess of par value results in a gain reported on the income statement. (Points : 1)
3. The account to be debited when a stock dividend is declared and distributed on the same date would be: (Points : 1)
4. A corporation must record a gain on sale for the sale of treasury stock at an amount greater than its purchase price. (Points : 1)
5. If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. (Points : 1)
6. Please refer to the following information for Petra Sales Company:
Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
Paid-in capital in excess of par: $1,600,000
Retained earnings: $2,440,000
Treasury stock: 20,000 shares purchased at $12 per share
If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, the total equity of the company will go down by $70,000. (Points : 1)
7. Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. What is the total amount of dividends that will be paid to the common shareholders? (Points : 1)
8. Which of the following describes the term outstanding stock? (Points : 1)
9. A corporation is a separate legal entity formed under the laws of a particular state. (Points : 1)
10. All forms and classes of stock carry voting rights. (Points : 1)
Click here for the solution: On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet
Thursday, August 13, 2015
Presented below is a list of items that could be included in the intangible assets section of the balance sheet
E12-1 Presented below is a list of items that could be included in the intangible assets section of the balance sheet.
a) Indicate which items on the list above would generally be reported as intangible assets in the balance sheet.
b) Indicate how, if at all, the items not reportable as intangible assets would be reported in the financial statements
1. Investment in a subsidiary company.
2. Timberland
3. Cost of engineering activity required to advance the design of a product to the manufacturing stage.
4. Lease prepayment (6 months' rent paid in advance)
5. Cost of equipment obtained.
6. Cost of searching for applications of new research findings.
7. Costs incurred in the formation of a corporation.
8. Operating losses incurred in the start-up of a business.
9. Training costs incurred in start-up of a business.
10. Purchase cost of a franchise.
11. Goodwill generated internally.
12. Cost of testing in search for product alternatives.
13. Goodwill acquired in the purchase of a business.
14. Cost of developing a patent.
15. Cost of purchasing a patent from an inventor.
16. Legal costs incurred in securing a patent.
17. Unrecovered costs of a successful legal suit to protect the patent.
18. Cost of conceptual formulation of possible product alternatives.
19. Cost of purchasing a copyright.
20. Research and development costs.
21. Long-term receivables.
22. Cost of developing a trademark.
23. Cost of purchasing a trademark.
Click here for the solution: Presented below is a list of items that could be included in the intangible assets section of the balance sheet
a) Indicate which items on the list above would generally be reported as intangible assets in the balance sheet.
b) Indicate how, if at all, the items not reportable as intangible assets would be reported in the financial statements
1. Investment in a subsidiary company.
2. Timberland
3. Cost of engineering activity required to advance the design of a product to the manufacturing stage.
4. Lease prepayment (6 months' rent paid in advance)
5. Cost of equipment obtained.
6. Cost of searching for applications of new research findings.
7. Costs incurred in the formation of a corporation.
8. Operating losses incurred in the start-up of a business.
9. Training costs incurred in start-up of a business.
10. Purchase cost of a franchise.
11. Goodwill generated internally.
12. Cost of testing in search for product alternatives.
13. Goodwill acquired in the purchase of a business.
14. Cost of developing a patent.
15. Cost of purchasing a patent from an inventor.
16. Legal costs incurred in securing a patent.
17. Unrecovered costs of a successful legal suit to protect the patent.
18. Cost of conceptual formulation of possible product alternatives.
19. Cost of purchasing a copyright.
20. Research and development costs.
21. Long-term receivables.
22. Cost of developing a trademark.
23. Cost of purchasing a trademark.
Click here for the solution: Presented below is a list of items that could be included in the intangible assets section of the balance sheet
Saturday, August 1, 2015
Elizabeth Company reported the following amounts in the stockholders' equity section of its December 31, 2010, balance sheet
E15-18 (Dividends and Stockholders' Equity Section) Elizabeth Company reported the following amounts in the stockholders' equity section of its December 31, 2010, balance sheet.
Preferred stock, 8%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000
Common stock, $5 par (100,000 shares authorized, 20,000 shares issued) 100,000
Additional paid-in capital 125,000
Retained earnings 450,000
Total $875,000
During 2011, Elizabeth took part in the following transactions concerning stockholders' equity.
1. Paid the annual 2010 $8 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2010.
2. Purchased 2,700 shares of its own outstanding common stock for $40 per share. Elizabeth uses the cost method.
3. Reissued 700 treasury shares for land valued at $30,000.
4. Issued 500 shares of preferred stock at $105 per share.
5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share.
6. Issued the stock dividend.
7. Declared the annual 2011 $8 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2012.
Instructions
(a) Prepare journal entries to record the transactions described above.
(b) Prepare the December 31, 2011, stockholders' equity section. Assume 2011 net income was $330,000.
Click here for the solution: Elizabeth Company reported the following amounts in the stockholders' equity section of its December 31, 2010, balance sheet
Preferred stock, 8%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000
Common stock, $5 par (100,000 shares authorized, 20,000 shares issued) 100,000
Additional paid-in capital 125,000
Retained earnings 450,000
Total $875,000
During 2011, Elizabeth took part in the following transactions concerning stockholders' equity.
1. Paid the annual 2010 $8 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2010.
2. Purchased 2,700 shares of its own outstanding common stock for $40 per share. Elizabeth uses the cost method.
3. Reissued 700 treasury shares for land valued at $30,000.
4. Issued 500 shares of preferred stock at $105 per share.
5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share.
6. Issued the stock dividend.
7. Declared the annual 2011 $8 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2012.
Instructions
(a) Prepare journal entries to record the transactions described above.
(b) Prepare the December 31, 2011, stockholders' equity section. Assume 2011 net income was $330,000.
Click here for the solution: Elizabeth Company reported the following amounts in the stockholders' equity section of its December 31, 2010, balance sheet
Saturday, July 25, 2015
Data for the Rodriquez Company are presented in E23-3
E23-4 (Preparation of Operating Activities Section—Direct Method) Data for the Rodriquez Company are presented in E23-3.
Instructions
Prepare the operating activities section of the statement of cash flows using the direct method.
Click here for the solution: Data for the Rodriquez Company are presented in E23-3
Instructions
Prepare the operating activities section of the statement of cash flows using the direct method.
Click here for the solution: Data for the Rodriquez Company are presented in E23-3
Wednesday, June 17, 2015
The stockholders’ equity section of the balance sheet for Atkins Company at December 31, 2011, is as follows
Problem 8-23 Analyzing the Stockholders’ Equity Section of the Balance Sheet
The stockholders’ equity section of the balance sheet for Atkins Company at December 31, 2011, is as follows:
AND SO ON
Note: The market value per share of the common stock is $25, and the market value per share of the preferred stock is $12.
Required
1. What is the par value per share of the preferred stock?
2. What is the dividend per share on the preferred stock?
3. What is the number of common stock shares outstanding?
4. What was the average issue price per share (price for which the stock was issued) of the common stock?
5. Explain the difference between the average issue price and the market price of the common stock.
6. If Atkins declared a 2-for-1 stock split on the common stock, how many shares would be outstanding after the split? What amount would be transferred from the retained earnings account because of the stock split? Theoretically, what would be the market price of the common stock immediately after the stock split?
Check:
a. Par Value per Share: $10
b. Dividend per Share $.60
Click here for the solution: The stockholders’ equity section of the balance sheet for Atkins Company at December 31, 2011, is as follows
The stockholders’ equity section of the balance sheet for Atkins Company at December 31, 2011, is as follows:
AND SO ON
Note: The market value per share of the common stock is $25, and the market value per share of the preferred stock is $12.
Required
1. What is the par value per share of the preferred stock?
2. What is the dividend per share on the preferred stock?
3. What is the number of common stock shares outstanding?
4. What was the average issue price per share (price for which the stock was issued) of the common stock?
5. Explain the difference between the average issue price and the market price of the common stock.
6. If Atkins declared a 2-for-1 stock split on the common stock, how many shares would be outstanding after the split? What amount would be transferred from the retained earnings account because of the stock split? Theoretically, what would be the market price of the common stock immediately after the stock split?
Check:
a. Par Value per Share: $10
b. Dividend per Share $.60
Click here for the solution: The stockholders’ equity section of the balance sheet for Atkins Company at December 31, 2011, is as follows
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