ADMS 3530 Chapter Notes - Chapter 14: Cumulative Voting, Retained Earnings, Preferred Stock

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carmineraccoon724

27 Apr 2019

School

York University

Department

Administrative Studies

Course

ADMS 3530

Professor

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Document Summary

Issued shares: shares that have been issued by the company. Outstanding shares: shares that have been issued by the company and are held by investors. Authorized share capital: maximum number of shares that the company is permitted to issue as specified in the firm"s articles of corporations. Par value: value of security shown on certificate. Additional paid-in capital: difference between issue price and par value of stock, also called capital surplus. Retained earnings: earnings not paid out in dividends. Any repurchase of stocks must be cancelled. (reduced common shares and retained earnings) Majority voting: voting system in which each director is voted on separately. Cumulative voting: voting system in which all the votes one shareholder is allowed to cast can be cast for one candidate for the board of directors. Preferred stock: stock that takes priority over common stock in regard to dividends.

Related Questions

At the end of 2017, Jeffco Inc. had the following equity accounts and balances:

Common shares, no par (175,000 shares issued and outstanding)	$1,926,400
Retained earnings	310,000

During 2018, Jeffco engaged in the following transactions involving its equity accounts:

Issued 8,000 common shares for $35 per share.

Issued 1,000 shares of 9%, $120 stated value preferred shares at $125 per share.

Declared and paid cash dividends of $15,000.

Repurchased and cancelled 500 common shares for $52 per share.

Required:

1. Prepare the journal entries for a through d. For a compound transaction, for those boxes in which no entry is required, leave the box blank.

a. 2018	Cash
	Common Shares
	(Record issue of common shares)
b.	Cash
	Preferred Shares
	Contributed Surplus-Preferred Shares
	(Record issue of preferred shares)
c.	Retained Earnings (or Dividends)
	Cash
	(Record declaration and payment of dividends)
d.	Retained Earnings
	Common Shares
	Cash
	(Record repurchase of common shares)

2. Assume that 2018 net income was $89,600. Prepare a partial statement of financial position showing only the shareholders' equity section at December 31, 2018.

Jeffco, Inc.
Statement of Financial Position (Partial)
December 31, 2018
Shareholders' equity:
Preferred shares, 9%, $120 stated value	$
Common shares, no par
Contributed surplus:
Preferred shares
Total capital stock
Retained earnings
Total shareholders' equity	$

cerisesnake518

At the end of 2017, Jeffco Inc. had the following equity accounts and balances:

Common shares, no par (175,000 shares issued and outstanding)	$1,926,400
Retained earnings	310,000

During 2018, Jeffco engaged in the following transactions involving its equity accounts:

Issued 8,000 common shares for $35 per share.

Issued 1,000 shares of 9%, $120 stated value preferred shares at $125 per share.

Declared and paid cash dividends of $15,000.

Repurchased and cancelled 500 common shares for $52 per share.

Required:

1. Prepare the journal entries for a through d. For a compound transaction, for those boxes in which no entry is required, leave the box blank.

a. 2018	Cash
	Common Shares
	(Record issue of common shares)
b.	Cash
	Preferred Shares
	Contributed Surplus-Preferred Shares
	(Record issue of preferred shares)
c.	Retained Earnings (or Dividends)
	Cash
	(Record declaration and payment of dividends)
d.	Retained Earnings
	Common Shares
	Cash
	(Record repurchase of common shares)

2. Assume that 2018 net income was $89,600. Prepare a partial statement of financial position showing only the shareholders' equity section at December 31, 2018.

Jeffco, Inc.
Statement of Financial Position (Partial)
December 31, 2018
Shareholders' equity:
Preferred shares, 9%, $120 stated value	$
Common shares, no par
Contributed surplus:
Preferred shares
Total capital stock
Retained earnings
Total shareholders' equity	$

taupewildebeest962

2. Kilgore Auto Parts reported the following information at December 31, 2004:

Preferred stock, 10%, $10 par value, cumulative $60,000

Common stock, $2 par value 10,000

Additional paid-in capital â Common stock 30,000

Retained earnings 50,000

Total contributed capital and retained earnings 150,000

Less: Treasury stock (100 shares common stock at cost) (5,000)

Total stockholdersâ equity $145,000

A) How many shares of common stock are issued?

B) How many shares of preferred stock are issued?

C) How many shares of common stock are outstanding?

D) What was the average price paid for the treasury shares when the company reaquired them?

E) What is the dividend PER SHARE that preferred shareholders are entitled to when a dividend is declared?

F) What was the average price of common shares when they were issued?

G) If a 15% stock dividend were issued, by how much would the total stockholdersâ equity balance change?

blackcat900

ADMS 3530 Chapter Notes - Chapter 14: Cumulative Voting, Retained Earnings, Preferred Stock

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