ACCT 2001 Study Guide - Final Guide: Legal Personality, Treasury Stock, Dividend

113 views9 pages

browngoose526

2 Aug 2015

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

Chapter 11: reporting and analyzing stockholders" equity (note: this worksheet is intended as an optional study guide. Identify and discuss the major characteristics of a corporation. 1: record the issuance of common stock, explain the accounting for the purchase of treasury stock, differentiate preferred stock from common stock, prepare the entries for cash dividends and understand the effect of stock dividends and stock splits. 6: prepare a comprehensive stockholders" equity section, omit-evaluate a corporation"s dividend and earnings performance from a stockholder"s perspective, appendix 11a - entries for stock dividends. Lo 1: the corporate form of organization: A company organized as a separate legal entity, with most of the rights and privileges of a person. A corporation that may have thousands of stockholders and whose stock is traded on a national securities market. A corporation that has only a few stockholders and whose stock is not available for sale to the general public.

Related Questions

Common Stock Issuance, Treasury Stock, Preferred Stock,Dividends, Comprehensive Income, Disclosure. Castleline,Inc. reported the following shareholdersâ equity section as of thebeginning of the current year:

Stockholder's Equity

Contributed Capital:
Common Stock, $1 Par Value, 3,850,000 shares authorized,905,000 shares issued, and 821,500 shares outstanding	$905,000
Additional Paid-in Capital in Excess of Par-Common	22,625,000
Total Contributed Capital:	$23,530,000
Retained Earnings:	$8,957,450
Accumulated Other Comprehensive Income	1,057,600
Less: Treasury Stock (83,500 common stock shares at cost)	(1,670,000)
Total Stockholders Equity:	$31,875,050

During the current year, Castleline engaged in the followingtransactions affecting the stockholdersâ equity section of itscurrent balance sheet.

Issued 400,000 shares of its $1 par value common stock at $31per share. The underwriter charged a 3% fee for issuing the shares.The stock issue costs are not capitalized.

Issued 500,000 shares of $10 par value 6% preferred stock(2,550,000 authorized) at $40 per share. These shares wereprivately placed and Castleline did not pay stock issue costs.

Purchased 220,000 shares of common stock at $32 per share.

Declared a $450,000 dividend for the first half of the year.(The declarations should be recorded separately for the common andthe preferred shares.)

Sold 105,000 of the treasury shares at $44 per share. (The83,500 treasury shares on hand at the beginning of the year areconsidered sold first. The company paid $20 per share for theseshares of treasury stock).

Paid the cash dividends.

Reported net income of $3,180,500 for the current year.

In addition to the net income, Castleline incurred an $801,000unrealized loss on an available-for-sale investment.

Declared a $450,000 cash dividend for the second half of theyear. (The declarations should be recorded separately for thecommon and the preferred shares.)

Closed out all dividends and other comprehensive incomeaccounts.

Required Â»

Prepare all journal entries required to record the transactionslisted above.

raspberryreindeer434

1. 11-4 Reporting the Stockholders' Equity Section of the BalanceSheet [LO2, LO3, LO4]

Shelby Corporation was organized in January 2010 by 10 stockholdersto operate an air conditioning sales and service business. Thecharter issued by the state authorized the following capitalstock:

Common stock, $1 par value, 200,000 shares.

Preferred stock, $8 par value, 6 percent, 50,000 shares.

During January and February 2010, the following stock transactionswere completed:

a.	Collected $40,000 cash from each of the 10 organizers and issued2,000 shares of common stock to each of them.
b.	Issued 15,000 shares of preferred stock at $25 per share; collectedin cash.

Net income for 2010 was $40,000; cash dividends declared and paidat year-end were $10,000.

Required:

Prepare the stockholders' equity section of the balance sheet atDecember 31, 2010. (Omit the "$" sign in your response.)

Stockholders' Equity%u2014December 31, 2010
Contributed capital:
Preferred stock	$
Additional paid-incapital, preferred stock
Common stock
Additional paid-incapital, common stock

Totalcontributed capital
Retained earnings

Total stockholders'equity	$

E11-1Computing Shares Outstanding [LO1]

The 2008 annual report for Fortune Brands, the seller of Pinnaclegolf balls and MasterLock padlocks,disclosed that 750 millionshares of common stock have been authorized. At the end of 2007,235 million shares had been issued and the number of shares intreasury stock was 81 million. During 2008, 1 million common shareswere reissued from treasury, and 5 million common shares werepurchased for treasury stock.

Required:

(a)	Determine the number of common shares issued at the end of 2008.(Enter your answer in millions.)

Issued stock

(b)	Determine the number of common shares in treasury at the end of2008. (Enter your answer in millions.)

Treasury stock

(c)	Determine the number of common shares outstanding at the end of2008. (Enter your answer in millions.)

Shares outstanding

erinfly733

Prepare the journal entry to record Jevonte Companyâs issuanceof 43,000 shares of its common stock assuming the shares havea:

$2 par value and sell for $21cash per share.

$2 stated value and sell for $21 cash per share.

Journal Entry Worksheet

Record the issuance of 43,000 shares of common stock assumingthe shares have a $2 par value and sell for $21 cash per share.

a.

*Enter debits before credits

Journal Entry Worksheet

Record the issuance of 43,000 shares of common stock assumingthe shares have a $2 par value and sell for $21 cash per share.

b.

*Enter debits before credits

July 15		Declared a cash dividend payableto common stockholders of $170,000.
Aug. 15		Date of record is August 15 forthe cash dividend declared on July 15.
Aug. 31		Paid the dividend declared onJuly 15.

Prepare journal entries to record the above transactions forEmerson Corporation. (If no journal entry is required,select "No journal entry required" in the first accountfield.)

Journal Entry Worksheet

Record the declaration of a cash dividend payable to commonstockholders.

Record the date of record for the cash dividend.

Record the payment of cash dividend.

Jul 15

*Enter debits before credits

Journal Entry Worksheet

Record the declaration of a cash dividend payable to commonstockholders.

Record the date of record for the cash dividend.

Record the payment of cash dividend.

Aug 15

*Enter debits before credits

Journal Entry Worksheet

Record the declaration of a cash dividend payable to commonstockholders.

Record the date of record for the cash dividend.

Record the payment of cash dividend.

Aug 31

*Enter debits before credits

Murray Company reports net income of $609,500 for the year. Ithas no preferred stock, and its weighted-average common sharesoutstanding is 230,000 shares.

Compute its basic earnings per share. (Leave no cellsblank.)

Basic Earnings Per Share
Choose Numerator:		/	Choose Denominator:	=	Basic EPS
	â	/		=	Basic EPS
	â	/		=		pershare

Rodriguez Corporation issues 6,000 shares of its common stockfor $63,500 cash on February 20. Prepare journal entries to recordthis event under each of the following separate situations.

1.	The stock has a $4 parvalue.
2.	The stock has neither par norstated value.
3.	The stock has a $2 statedvalue.

Journal Entry Worksheet

Record the issue of 6,000 shares of $4 par value common stockfor $63,500 cash.

Record the issue of 6,000 shares of no-par, no-stated valuecommon stock for $63,500 cash.

Record the issue of 6,000 shares of $2 stated value common stockfor $63,500 cash.

1

*Enter debits before credits

Journal Entry Worksheet

Record the issue of 6,000 shares of $4 par value common stockfor $63,500 cash.

Record the issue of 6,000 shares of no-par, no-stated valuecommon stock for $63,500 cash.

Record the issue of 6,000 shares of $2 stated value common stockfor $63,500 cash.

2

*Enter debits before credits

Journal Entry Worksheet

Record the issue of 6,000 shares of $4 par value common stockfor $63,500 cash.

Record the issue of 6,000 shares of no-par, no-stated valuecommon stock for $63,500 cash.

Record the issue of 6,000 shares of $2 stated value common stockfor $63,500 cash.

3

*Enter debits before credits

Match each description 1 through 6 with the characteristic ofpreferred stock that it best describes in the dropdown next to eachdescription.

	Description	Characteristic
1.	Holders of the stock areentitled to receive current and all past dividends before commonstockholders receive any dividends.
2.	The issuing corporation canretire the stock by paying a prespecified price.
3.	Holders of the stock canreceive dividends exceeding the stated rate under certainconditions.
4.	Holders of the stock are notentitled to receive dividends in excess of the stated rate.
5.	Holders of this stock canexchange it for shares of common stock.
6.	Holders of the stock lose anydividends that are not declared in the current year.

eringnat357

ACCT 2001 Study Guide - Final Guide: Legal Personality, Treasury Stock, Dividend

Document Summary

Get access

Related Documents

ACCT 2001 Lecture Notes - Lecture 11: Promissory Note, Net Income, Investment

ACCT 2001 Chapter : Ch 11 Study Guide Filled In

ACCT 2001 Chapter : Ch 11 Study Guide

Related Questions