Accounting processes

Determining Shares Issued Andrew Inc.'s balance sheet shows the following balances: Common Stock $750,000 Additional Paid in Capital $ 2,250,000 Treasury Stock (1,000 shares) $ 10,000 A. If the par value of the stock is $2, how many shares have been issued? How many are outstanding?] B. What was the average price of the shares issued?

A. Common Stock (at par) = $750,000 Par value of stock is $2 $750,000/$2 = 375,000 issued shares 375,000 issued - 1000 treasury = 374,000 Outstanding B. $3,000,000 total paid in capital/ 375,000 issued shares = $8 per share on average

Preferred Stock Dividends This Corporation has 800 shares of $2.00 preferred stock issued and outstanding in addition to its common stock. On April 12, This Corp's board of directors declared its regular cash dividend on the preferred stock. The dividends were paid on May 1.

Day Declared (Apr. 12) Debit to Retained Earnings the dividend amount Credit Dividends Payable by same DR:Retained Earnings 1,600 CR: Dividends Payable 1,600 Dividends paid date (May 1) Debit to Dividends Payable the same amount Credit Cash the same amount DR:Dividends Payable 1,600 CR: Cash 1,600

Dividend Dates On Jan. 15, 2016, This Corporation declared a $60,000 cash dividend. The record date is Feb. 1, 2016, with the dividends paid on Feb. 20. A. Record the entry on Jan 15, 2016

Day Declared (Jan. 15) Debit to Retained Earnings the dividend amount Credit Dividends Payable by same DR:Retained Earnings 60,000 CR: Dividends Payable 60,000 Day Recorded (NO ENTRY NEEDED) Dividends paid date (Feb. 20) Debit to Dividends Payable the same amount Credit Cash the same amount DR:Dividends Payable 60,000 CR: Cash 60,000

Issuing Stock above Par Value This corporation issued 1000 shares of its $1.00 par common stock for $4.00 per share on February 1st

Debit Cash for (Shares * $per share) Credit Common stock for (Shares* par value) Credit Remaining to APIC (Cash-Common Stock) Journal Entry DR: Cash 4000 CR: Common Stock 1000 APIC 3000

If this corporation issues an additional 1,000 shares of its $1 par value common stock at $6 per share

Debit Cash for (Shares * $per share) Credit Common stock for (Shares* par value) Credit Remaining to APIC (Cash-Common Stock) Journal Entry DR: Cash 6000 CR: Common Stock 1000 APIC 5000

Resale of Treasury Stock Record the entry if This Corporation resells 500 of the treasury stocks for $8 per share

Debit Cash for (amount being resold* $per share) Credit Treasury Stock for (amount being resold* original $per share)' Journal Entry DR: Cash 4,000 ($8*500) CR: Treasury Stock 3000 ($6*500) APIC 1000 (leftover) ASSETS AND OE GO UP

Issuing Stock for other Assets This Corporation received computers and other technology items from Tim Cook valued at $250,000. Instead of receiving cash payment, Cook was issues 150,000 shares of this corporation's $1 par common stock.

Debit the value of the assets ($) Credit Common stock for (Shares* par value) Credit Remaining to APIC (Assets-Common Stock) Journal Entry DR: Computer/Equipment Assets 250,000 CR: Common Stock 150,000 APIC 100,000

Stock Dividends This Corporation declares a 5% stock dividend when the market value per share is $6.00. This Corp. has 25,000 shares of $1 par common stock issued and outstanding. A. Record the entry for issuing the 5% stock dividend. B. Record the entry if the dividend was 50%.

Figure out the new shares issued by (Percent of dividend* Shares issued) Then debit Retained Earnings by (new shares* market value per share or if percentage is greater than 25% PAR VALUE) Credit Common Stock for (new shares$) and Credit APIC for whats left over Journal Entry A. DR: Retained Earnings 7,500 (1250*6) CR: Common Stock 1,250 APIC 6,250 B. DR: Retained Earnings 12,500 (12,500*1 because 50%>25%) CR: Common Stock 12,500

Recording Treasury Stock Purchases This corporation issued 3500 shares of its $1.00 par common stock for $4.00 per share. Record the entry if this corporation purchases 1000 shares from the stockholders for $6 a share.

Journal Entry Common Stock Issuance: DR: Cash 14,000 CR: Common Stock 3,500 APIC 10500 Debit Treasury stock for (shares *$ per share) Credit cash for same Repurchase: DR: Treasury Stock 6000 CR: Cash 6000 Treasury stock is contra stockholders equity SO ASSETS AND OE GO DOWN

Stock Splits How will a 3 for 1 stock split affect the following items, given the following info? Before # of shares issued 300,000 # of shares outstanding 210,000 Par Value 3

Literally increase by the percentage. Decrease par value proportionally After 900,000 630,000 $1