Chapter 11 Practice

Record the issuance of 46,000 shares of common stock assuming the shares have a $2 stated value and sell for $24 cash per share.

(Debit) Cash 1,104,000 (Credit) Common stock, $2 stated value 92,000 (Credit) Paid in capital in excess of stated value, common stock 1,012,000

Record the issuance of 63,000 shares of no-par value common stock assuming the shares sell for $26 cash per share.

(Debit) Cash 1,638,000 (Credit)Common stock, no par value 1,638,000

Record the issue of 19,000 shares of no-par, no-stated value common stock for $152,000 cash.

(Debit) Cash 152,000 (Credit) Common stock, no par value 152,000

Record the issuance of 51,500 shares of $4 par value common stock for $324,500 cash.

(Debit) Cash 324,500 (Credit) Common stock, $4 par value 206,000 (Credit) Paid in capital in excess of par value, common stock 118,500

Record the issue of 4,000 shares of $5 par value common stock for $35,000 cash.

(Debit) Cash 35,000 (Credit) Common stock, $5 par value 20,000 (Credit) Paid in capital in excess of par value, common stock 15,000

Record the issuance of 74,000 shares of $8 par value common stock assuming the shares sell for $8 cash per share.

(Debit) Cash 592,000 (Credit) Common stock, $8 par value 592,000

Record the issue of 1,000 shares of $50 par value preferred stock for $60,000 cash.

(Debit) Cash 60,000 (Credit) Preferred stock, $50 par value 50,000 (Credit) Paid in capital in excess of par value, preferred stock 10,000

Prepare the journal entry to record Tamas Company's issuance of 6,400 shares of $100 par value, 8% cumulative preferred stock for $104 cash per share. Record the issue of $100 par value preferred stock for $104 cash per share.

(Debit) Cash 665,600 (Credit) Preferred stock, $100 par value 640,000 (Credit) Paid in capital in excess of par value, preferred stock 25,600

Record the issuance of 74,000 shares of $8 par value common stock assuming the shares sell for $9 cash per share.

(Debit) Cash 666,000 (Credit) Common stock, $8 par value 592,000 (Credit) Paid in capital in excess of par value, common stock 74,000

Record the issuance of no-par value common stock for $88,000 cash.

(Debit) Cash 88,000 (Credit) Common stock, no par value 88,000

Record the payment of cash dividend.

(Debit) Common dividends payable 163,000 (Credit) Cash 163,000

On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $40 per share on February 5 before the stock dividend. Record the distribution of a 20% stock dividend.

(Debit) Commons tock dividend distributable 120,000 (Credit) Common stock $10 par value 120,000

Record the issuance of 3,800 shares of $20 par value common stock for $57,000 of inventory, $175,000 of machinery, and acceptance of a $93,000 note payable.

(Debit) Inventory 57,000 (Debit) Machinery 175,000 (Credit) Note payable 93,000 (Credit) Common stock, $20 par value 76,000 (Credit) Pain in capital in excess of par value, common stock 63,000

Record the issuance of 63,000 shares of no-par value common stock assuming the shares are exchanged for land valued at $1,638,000.

(Debit) Land 1,638,000 (Credit)Common stock, no par value 1,638,000

Record the issue of 7,000 shares of $7 par value common stock in exchange for land valued at $45,000 and a building valued at $85,000.

(Debit) Land 45,000 (Debit) Buildings 85,000 (Credit) Common stock, $7 par value 49,000 (Credit) Paid in capital in excess of par value, common stock 81,000

Record the issue of 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has a $1 per share stated value.

(Debit) Organization expenses 40,000 (Credit) Common stock, $1 stated value 2,000 (Credit) Paid in capital in excess of stated value, common stock 38,000

Record the issue of 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has no stated value.

(Debit) Organization expenses 40,000 (Credit) Common stock, no par value 40,000

On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $40 per share on February 5 before the stock dividend. Record the declaration of a 20% stock dividend.

(Debit) Retained earnings 480,000 (Credit) Common stock dividend distributable 120,000 (Credit) Paid-in capital in excess of par value, common stock 360,000

Record the issue of 19,000 shares of $2 par value common stock for $152,000 cash.

(Debit)Cash 152,000 (Credit) Common stock, $2 par value 38,000 (Credit) Paid in capital in excess of par value, common stock 114,000

Record the issue of 19,000 shares of $5 stated value common stock for $152,000 cash.

(Debit)Cash 152,000 (Credit) Common stock, $5 stated value 95,000 (Credit) Paid in capital in excess of stated value, common stock 57,000

Record the declaration of a cash dividend payable to common stockholders.

(Debit)Retained Earnings 163,000 (Credit) Common dividends payable 163,000

Epic Company earned net income of $980,500 this year. There were 390,000 weighted-average common shares outstanding, and preferred shareholders received a $25,000 cash dividend. Compute Epic Company's basic earnings per share.

(Net Income-Preferred Dividends)/Weighted average common shares outstanding(980,500-25,000)/390,000

Which of the following statements are true regarding dividends?

-A stock dividend increases the number of outstanding shares -The payment date reflects the date a cash dividend is paid to stockholders -A stock dividend commonly indicates management's confidence that the company is doing well

Indicate which activities of Stockton Corporation violated the rights of a stockholder who owned one share of common stock.

-Paid the stockholders a smaller dividend per share than another common stockholder -The company did not provide all stockholders with timely finanical reports -Rejected the stockholder-s sale of stock on an organized exchange

Identify which of the following statements are true for the corporate form of organization.

-Shareholders are not personally liable for corporate acts -Directors oversee its business affairs -The sale of shares from one stockholders to another does not impact operations. An exception is when it changes the makeup of directors -Stockholders do not have the power to bind the corporation to contracts

1)Receives current and all past dividends before common stockholders receive any dividends 2)Receives dividends exceeding the stated rate under certain conditions 3)Not entitled to receive dividends in excess of the stated rate 4)Loses any dividends that are not declared in the current year.

1)Cumulative 2)Participating 3)Nonparticipating 4)Noncumulative

1)Owner Liability 2) Tax status of income 3)Transferability of ownership 4)Ability to raise large capital amounts 5)Duration of life 6)Government regulation 7)Legal status 8)Mutual agency

1)Limited 2)Corporate income is taxed 3)Readily transferred 4)High because buying stock is attractive 5)Indefinite 6)More severe than partnerships and proprietorships 7)Entity with similar rights as individual 8)Stockholders cannot bind corporation to contract

On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend. Compute the number of shares outstanding after the split.

150,000

Assuming the facts in part 1, if Tamas declares a year-end cash dividend, what is the amount of dividend paid to preferred shareholders? (Assume no dividends in arrears.)

Par Value per Preferred Share: 100 Dividend Rate: 8% Dividend per preferred Share:8 Number of Preferred Shares: 6,400 Preferred Dividend: 51,200

On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $40 per share on February 5 before the stock dividend. Prepare the stockholders' equity section after the stock dividend is distributed. (Assume no other changes to equity.)

Retained Earnings 70,000 Common Stock 720,000 Paid in capital in excess of par value, common stock 785,000

The following information is from Amos Company for the year ended December 31, 2019. -Retained earnings at December 31, 2018 (before discovery of error), $1,375,000. -Cash dividends declared and paid during the year, $43,000. -Two years ago, it forgot to record depreciation expense of $55,500 (net of tax benefit). -The company earned $126,000 in net income this year. Prepare a statement of retained earnings for Amos Company.

Retained earnings, Dec. 31, 2018, as previously reported 1,375,000 Prior period adjustment Depreciation expense not recorded (net of tax) -55,500 Retained earnings, Dec. 31, 2018, as adjusted 1,319,500 Add: Net income 126,000 Less: Dividends -43,000 Retained earnings, Dec. 31, 2019 1,402,500

The following information is from Amos Company for the year ended December 31, 2019. -Retained earnings at December 31, 2018 (before discovery of error), $868,000. -Cash dividends declared and paid during the year, $14,000. -Two years ago, it forgot to record depreciation expense of $36,600 (net of tax benefit). -The company earned $215,000 in net income this year. Prepare a statement of retained earnings for Amos Company.

Retained earnings, Dec. 31, 2018, as previously reported 868,000 Prior period adjustment Depreciation expense not recorded (net of tax) -36,600 Retained earnings, Dec. 31, 2018, as adjusted 831,400 Add: Net income 215,000 Less: Dividends -14,000 Retained earnings, Dec. 31, 2019 1,032,400

Record the issuance of 46,000 shares of common stock assuming the shares have a $2 par value and sell for $24 cash per share.

(Debit) Cash 1,104,000 (Credit) Common stock, $2 par value 92,000 (Credit) Paid in capital in excess of par value, common stock 1,012,000

On January 1, Payson Inc. had a retained earnings balance of $36,000. During the year, Payson reported net income of $31,600 and paid cash dividends of $18,600. Calculate the retained earnings balance at its December 31 year-end. Ending retained earnings

49,000

On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend. Compute the number of shares outstanding after the distribution is made.

75,000

On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend. Prepare the updated stockholders' equity section after the split.

Common stock 500,000 Paid in capital in excess of par value, common stock 200,000 Retained earnings 660,000 Total stockholders' equity 1,360,000

On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend. Prepare the updated stockholders' equity section after the distribution is made.

Common stock-$10 par value 750,000 Paid in capital in excess of par value, common stock 200,000 Retained earnings 410,000

Record the entry on the date of record for the cash dividend of $163,000.

No journal entry required