MGAB01H3 Chapter Notes - Chapter 12: Stock Split, Financial Statement

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18 May 2016

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MGAB01H3 Full Course Notes

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Summary for chapter12: accounting for issuance of shares preferred shares or common shares (record and measure the transactions, for cash, for services rendered, for goods and services. For non monetary transactions (item b and c,) we always use the fair value of. Shares as the value of the goods and/or services; otherwise we use the fair value of assets received or services being rendered: accounting for dividends cash, there are 3 dates: Memo on the books and records of the company. Cr cash: remember to use 4 column chart help us determine the number of shares outstanding at any given point in time, accounting for stock dividends, there are also 3 dates: Cr stock dividends distribute (not a liability, part of se"s section) Just a memo on the books and records of the company. Cr common stock: measurement of stock dividends depends on whether the % is small (<20-

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Selected transactions completed by Canyon Ferry BoatingCorporation during the current fiscal year are as follows:

Jan.	8	Split the common stock 2 for 1 andreduced the par from $80 to $40 per share. After the split, therewere 123,000 common shares outstanding.
Apr.	30	Declared semiannual dividends of$0.80 on 16,500 shares of preferred stock and $0.27 on the commonstock payable on July 1.
Jul.	1	Paid the cash dividends.
Oct.	31	Declared semiannual dividends of$0.80 on the preferred stock and $0.15 on the common stock (beforethe stock dividend). In addition, a 3% common stock dividend wasdeclared on the common stock outstanding. The fair market value ofthe common stock is estimated at $51.
Dec.	31	Paid the cash dividends and issuedthe certificates for the common stock dividend.

Journalize the transactions. If no entry is required, simplyskip to the next transaction. Refer to the Chart of Accounts forexact wording of account titles.

Journalize the transactions. If no entry is required, simplyskip to the next transaction. Refer to the Chart of Accounts forexact wording of account titles. Enter the October 31 and December31 transactions as two separate journal entries on each date.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST.REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
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Complete each question record transactions

Question 1

Hernandez Company had the following stock transactions duringthe year:

Issued 25,000 shares of $1 par common stock for $25,000.
Issued 20,000 shares of $1 par common stock for $22,000cash.
Issued 22,000 shares of $1 par common stock for $21,000cash.
Issued 2,000 shares of $50 par, 8% preferred stock for $100,000cash.
Issued 1,000 shares of $50 par, 8% preferred stock for $49,000cash.
Issued 1,000 shares of $50 par 8% preferred stock for$51,500
Issued 2,500 shares of no-par common stock for $11,875 cash
Issued 1,500 shares of no par 7% preferred stock for $72,000cash.

Question 2

Kris Kraft Stores had the following stock transactions duringthe year.

Issued 4,000 shares of no par common stock with a stated valueof $10 per share for $40,000 cash.
Issued 6,000 shares of no par common stock with a stated valueof $8 per share for $50,000 cash.
Issued 5,000 shares of no par 6% preferred stock with a statedvalue of $15 per share for $75,000 cash.
Issued 3,000 shares of no par 6% preferred stock with a statedvalue of $20 per share for $58,000 cash.
Issued 10,000 shares of $8 par common stock with a $9 fairmarket value for a building with an uncertain fair marketvalue.
Issued 10,000 shares of $5 common stock for land with a fairmarket value of $50,000.
Issued 8,000 shares of $50 par, 8% preferred stock for land witha fair market value of $405,000.

Question 3

During the year ended December 21, 2013, Smith Company completedthe following transactions:

04/15 Declared a semiannual dividend of $0.80 per share onpreferred stock and $0.05 per share on common stock to shareholdersof record on 05/05, payable on 05/10. Currently, 4,000shares of $100 par preferred stock and 50,000 shares of $1 parcommon stock are outstanding.
05/05 Record date of record entry.
05/10 Paid cash dividends.
10/15 Declared semiannual dividend of $0.80 per share onpreferred stock and $0.50 per share on common stock to shareholdersof record on November 5, payable on November 20.
11/5 Record date of record entry.
11/20 Paid cash dividends
11/22 Declared a 10% stock dividend to shareholders of record onDecember 8, distributable on December 16. Market valueof the common stock was estimated to be $8.
12/08 Record date of record entry.
12/16 issued certificated for common stock dividend.
12/20 Board of directors declared a two for one common stocksplit.

Selected transactions completed by Big Water Boating Corporationduring the current fiscal year are as follows:
Jan. 3. Split the common stock 3 for 1 and reduced the par from $90to $30 per share. After the split, there were 750,000 common sharesoutstanding.
Apr. 7. Purchased 50,000 shares of the corporation%u2019s owncommon stock at $33, recording the stock at cost.
May 1. Declared semiannual dividends of $1.40 on 35,000 shares ofpreferred stock and $0.09 on the common stock to stockholders ofrecord on May 15, payable on June 1.
June 1. Paid the cash dividends.
July 29. Sold 36,000 shares of treasury stock at $40. receivingcash.
Nov. 15. Declared semiannual dividends of $1.40, on the preferredstock and $0.15 on the common stock (before the stock dividend). Inaddition, a 2% common stock dividend was declared on the commonstock outstanding. The fair market value of the common stock isestimated at $41.
Dec. 31. Paid the cash dividends and issued the certificates forthe common stock dividend.
Instructions:
Journalize the transactions

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MGAB01H3 Chapter Notes - Chapter 12: Stock Split, Financial Statement

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