FA Chapter 11

On January 1, Bramble Corp. had 95,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $7 per share. During the year, the following occurred. Apr.1 Issued 24,500 additional shares of common stock for $16 per share. June 15 Declared a cash dividend of $3 per share to stockholders of record on June 30. July 10 Paid the $3 cash dividend. Dec.1 Issued 3,000 additional shares of common stock for $19 per share. Dec. 15 Declared a cash dividend on outstanding shares of $1.60 per share to stockholders of record on December 31. Prepare the entries, on each of the three dividend dates.

June 15 debit: cash dividends $360,000 credit: dividends payable $360,000 July 10 debit: dividends payable $360,000 credit: cash $360,000 Dec. 15 debit: cash dividends $196,800 credit: dividends payable $196,800

Kingbird, Inc. has the following accounts at December 31: Common Stock, $12 par, 4,600 shares issued, $55,200; Paid-in Capital in Excess of Par—Common Stock $33,100; Retained Earnings $47,000; and Treasury Stock, 450 shares, $10,800. What is total stockholders' equity?

$124,500

Splish Brothers Corporation issued 102,000 shares of $18 par value, cumulative, 7% preferred stock on January 1, 2018, for $2,570,000. In December 2020, Splish Brothers declared its first dividend of $790,000. If the preferred stock is cumulative, how much of the $790,000 would be paid to common stockholders?

$404,440

Gorton Corporation has 30,000 shares of $10 par value common stock outstanding when it announces a 2-for-1 stock split. Before the split, the stock had a market price of $120 per share. What will be the approximate market price per share?

$60

Splish Brothers Corporation issued 102,000 shares of $18 par value, cumulative, 7% preferred stock on January 1, 2018, for $2,570,000. In December 2020, Splish Brothers declared its first dividend of $790,000. If the preferred stock is not cumulative, how much of the $790,000 would be paid to common stockholders?

$661,480

Land appraised at $80,000 is purchased by issuing 1,000 shares of $20 par value common stock. The market price of the shares at the time of the exchange, based on active trading in the securities market, is $95 per share. Should the land be recorded at $20,000, $80,000, or $95,000?

$95,000

The corporate charter of Luney Corporation allows the issuance of a maximum of 100,000 shares of common stock. During its first two years of operations, Luney sold 70,000 shares to shareholders and reacquired 7,000 of these shares. After these transactions, how many shares are authorized, issued, and outstanding? Luney Corporation is authorized to sell ____ shares. Luney has ______ shares issued. Luney has _________ shares outstanding.

100,000 70,000 63,000

Tamarisk, Inc. has 77,000 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend.

11/1 debit: cash dividends $77,000 credit: dividends payable $77,000 12/1 debit: dividends payable $77,000 credit: cash $77,000

Wildhorse Co. has 47,000 shares of $11 par value common stock outstanding. It declares a 14% stock dividend on December 1 when the market price per share is $19. The dividend shares are issued on December 31. Prepare the entries for the declaration and issuance of the stock dividend.

12/1 debit: stock dividends $125,020 credit: common stock dividends distributable $72,380 credit: paid-in capital in excess of par-common stock $52,640 12/31 debit: common stock dividends distributable $72,380 credit: common stock $72,380

Cullumber Company has had 4 years of net income. Due to this success, the market price of its 300,000 shares of $3 par value common stock has increased from $10 per share to $50. During this period, paid-in capital remained the same at $4,200,000. Retained earnings increased from $1,700,000 to $11,000,000. President E. Rife is considering either a 12% stock dividend or a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on retained earnings.

Retained earnings after stock dividend: $9,200,000 Retained earnings after stock split: $11,000,000

Herr Corporation has 3,000 shares of 7%, $100 par value preferred stock outstanding at December 31, 2019. At December 31, 2019, the company declared a $105,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders. 1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years.

The dividend paid to preferred stockholders $21,000 The dividend paid to common stockholders $84,000

Cullumber Company has had 4 years of net income. Due to this success, the market price of its 300,000 shares of $3 par value common stock has increased from $10 per share to $50. During this period, paid-in capital remained the same at $4,200,000. Retained earnings increased from $1,700,000 to $11,000,000. President E. Rife is considering either a 12% stock dividend or a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on total stockholders' equity.

Total stockholders' equity after stock dividend: $15,200,000 Total stockholders' equity after stock split: $15,200,000

Splish Brothers Corporation issued 102,000 shares of $18 par value, cumulative, 7% preferred stock on January 1, 2018, for $2,570,000. In December 2020, Splish Brothers declared its first dividend of $790,000. Prepare Splish Brothers's journal entry to record the issuance of the preferred stock.

debit: cash $2,570,000 credit: preferred stock $1,836,000 credit paid-in capital in excess of par-preferred stock $734,000

On June 1, Metlock, Inc. issues 2,850 shares of no-par common stock at a cash price of $9 per share. Journalize the issuance of the shares assuming the stock has a stated value of $2 per share.

debit: cash $25,650 credit: common stock $5,700 credit: paid-in capital in excess of stated value- common stock $19,950

On May 10, Sheridan Company issues 2,250 shares of $10 par value common stock for cash at $18 per share. Journalize the issuance of the stock.

debit: cash $40,500 credit: common stock $22,500 credit: paid-in capital in excess of par-common stock $18,000

Novak Corp. issues 5,900 shares of $105 par value preferred stock for cash at $145 per share. Journalize the issuance of the preferred stock.

debit: cash $855,500 credit: preferred stock $619,500 credit: paid-in capital in excess of par-preferred stock $236,000

Marigold Inc.'s $9 par value common stock is actively traded at a market price of $15 per share. Marigold issues 4,500 shares to purchase land advertised for sale at $83,000. Journalize the issuance of the stock in acquiring the land.

debit: land $67,500 credit: common stock $40,500 credit: paid-in capital in excess of par-common stock $27,000

What are the two principal components of stockholders' equity?

paid-in capital and retained earnings