Arnold Corporation has been authorized to issue 40,000 shares of $100 par value

ACC 291 Week 4 Assignment

P11-6A Arnold Corporation has been authorized to issue 40,000 shares of $100 par value, 8%, noncumulative preferred stock and 2,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2011, the ledger contained the following balances pertaining to stockholders’ equity. Preferred Stock $ 240,000 Paid-in Capital in Excess of Par Value—Preferred 56,000 Common Stock 2,000,000 Paid-in Capital in Excess of Stated Value—Common 5,700,000 Treasury Stock—Common (1,000 shares) 22,000 Paid-in Capital from Treasury Stock 3,000 Retained Earnings 560,000 The preferred stock was issued for land having a fair market value of $296,000.All common stock issued was for cash. In November, 1,500 shares of common stock were purchased for the treasury at a per share cost of $22. In December, 500 shares of treasury stock were sold for $28 per share. No dividends were declared in 2011.

Instructions
(a) Prepare the journal entries for the:
(1) Issuance of preferred stock for land.
(2) Issuance of common stock for cash.
(3) Purchase of common treasury stock for cash.
(4) Sale of treasury stock for cash.
(b) Prepare the stockholders’ equity section at December 31, 2011


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Vargas Corporation is authorized to issue 20,000 shares of $50 par value

Vargas Corporation is authorized to issue 20,000 shares of $50 par value, 10% Preferred stock and 125,000 shares of $3 par value common stock. On January 1, 2010, the ledger contained the following stockholders' equity balances.

Preferred Stock (10,000 shares) $500,000
Paid-in Capital in Excess of Par Value-Preferred 75,000
Common Stock (70,000 shares) 210,000
Paid-in Capital in Excess of Par Value-Common 700,000
Retained Earnings 300,000

During 2010, the following transactions occurred.

Feb. 1 Issued 2,000 shares of preferred stock for land having a fair market value of $125,000.
Mar. 1 Issued 1,000 shares of preferred stock for cash at $65 per share.
July 1 Issued 16,000 shares of common stock for cash at $7 per share.
Sept. 1 Issued 400 shares of preferred stock for a patent. The asking price of the patent was $30,000. Market values were preferred stock $70 and patent indeterminable.
Dec. 1 Issued 8,000 shares of common stock for cash at $7.50 per share.
Dec. 31 Net income for the year was $260,000. No dividends were declared.

Instructions
(a) Journalize the transactions and the closing entry for net income.
(b) Enter the beginning balances in the accounts, and post the journal entries to the stockholders’ equity accounts. (Use J2 for the posting reference.)
(c) Prepare a stockholders’ equity section at December 31, 2010.


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The balance sheet of Lennox Health Foods, at December 31, 2011 reported 120,000 shares of no-par common stock authorized

P13-25A Journalizing dividend and treasury stock transactions, and preparing stockholders' equity

The balance sheet of Lennox Health Foods, at December 31, 2011 reported 120,000 shares of no-par common stock authorized, with 25,000 shares issued and a Common stock balance of $190,000. Retained earnings had a balance of $115,000. During 2012, the company completed the following selected transactions:

Mar 15 - Purchased 9,000 shares of treasury stock at $8 per share.
Apr 30 - Distributed a 10% stock dividend on the outstanding shares of common stock. The market value of common stock was $9 per share.
Dec 31 - Earned net income of $110,000 during the year. Closed net income to Retained

Requirements:
Record the transactions in the general journal. Explanations are not required. Prepare the stockholders' equity section of Lennox Health Foods' balance sheet at December 31, 2012.


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At Reyes Company, checks are not prenumbered because both the purchasing agent and the treasurer are authorized to issue checks

E7-5 At Reyes Company, checks are not prenumbered because both the purchasing agent and the treasurer are authorized to issue checks. Each signer has access to unissued checks kept in an unlocked file cabinet. The purchasing agent pays all bills pertaining to goods purchased for resale. Prior to payment, the purchasing agent determines that the goods have been received and verifies the mathematical accuracy of the vendor’s invoice. After payment, the invoice is filed by vendor and the purchasing agent records the payment in the cash disbursements journal. The treasurer pays all other bills following approval by authorized employees. After payment, the treasurer stamps all bills “paid,” files them by payment date, and records the checks in the cash disbursements journal. Reyes Company maintains one checking account that is reconciled by the treasurer.

Instructions
(a) List the weaknesses in internal control over cash disbursements.
(b) Identify improvements for correcting these weaknesses.


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Davis Corporation was authorized to issue 100,000 shares of $10 par common stock and 50,000 shares of $50 par, 6 percent, cumulative preferred stock

Problem 8-18 (Recording and reporting stock transactions and cash dividends across two accounting cycles) Davis Corporation was authorized to issue 100,000 shares of $ 10 par common stock and 50,000 shares of $ 50 par, 6 percent, cumulative preferred stock. Davis Corporation completed the following transactions during its first two years of operation.
2012 Jan.
2 Issued 5,000 shares of $ 10 par common stock for $ 28 per share.
15 Issued 1,000 shares of $ 50 par preferred stock for $ 70 per share.
Feb. 14 Issued 15,000 shares of $ 10 par common stock for $ 30 per share.
Dec.
31 During the year, earned $ 170,000 of cash service revenue and paid $ 110,000 of cash operating expenses.
31 Declared the cash dividend on outstanding shares of preferred stock for 2012. The dividend will be paid on January 31 to stockholders of record on January 15, 2013.
2013 Jan. 31 Paid the cash dividend declared on December 31, 2012.
Mar. 1 Issued 2,000 shares of $ 50 par preferred stock for $ 58 per share.
June 1 Purchased 500 shares of common stock as treasury stock at $ 43 per share. Dec. 31 During the year, earned $ 210,000 of cash service revenue and paid $ 175,000 of cash operating expenses.
31 Declared the dividend on the preferred stock and a $ 0.60 per share dividend on the common stock.

Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare the stockholders’ equity section of the balance sheet at December 31, 2012.
c. Prepare the balance sheet at December 31, 2013.

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