ACCT 1201 Chapter Notes - Chapter 11: Stock Split, Preferred Stock, Pro Rata

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lilacmule890

22 Mar 2016

School

Northeastern University

Department

Accounting

Course

ACCT 1201

Professor

Ganesh Krishnamoorthy

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Document Summary

Contributed capital from the sale of stock is the amount of money stockholders invest through the purchase of share. It is the sum of common stock and additional paid in capital (cid:1) Corporations are formed through a application to a state government. The state then issues a charter also called the articles of incorporations. Corporations are governed by a board of directors elected by the (cid:1) (cid:1) (cid:1) stockholders. The corporate charter specifies the maximum number of shares that can be sold to the public refered to as the authorized number of shares. Issued shares stock that has been sold to the public. Treasury stock is stock that a company bought back from the public. When companies buy back stock a difference is created between the number of issued shares and the number of outstanding shares currently held by individual stockholders: issues shares, less: treasury stock, outstanding shares (cid:1)

Related Questions

Shelby Corporation was organized in January 2013 to operate anair conditioning sales and service business. The charter issued bythe state authorized the following capital stock:

Common stock, $1 parvalue, 200,000 shares.

Preferred stock, $10par value, 6 percent, 50,000 shares.

During January andFebruary 2013, the following stock transactions werecompleted:

a.	Collected $841,000 cash andissued 29,000 shares of common stock.
b.	Issued 19,500 shares ofpreferred stock at $39 per share; collected in cash.

Net income for 2013 was $59,000;cash dividends declared and paid at year-end were $10,000.

Required:

Prepare the stockholdersâ equity section of the balance sheet atDecember 31, 2013.

This is what i have

Contributed capital

Preferred stock issued [19500*10] 195000

Additional preferred stock paid in capital [19500*29] 565500

Common stock issued [29000*1] 29000

Additional common stock paid in capital 812000

Total Contributed Capital 1601500

What are the retained earnings/net income

and the total stockholders equity?

Its not add: Net Income 59000

Less: dividends (10000)

I tried that and it didnt work. where am I going wronghere?

chocolateporpoise530

The stockholders' equity section on the December 31, 2012,balance sheet of Chemfast Corporation reported the followingamounts: Contributed Capital Preferred Stock (par $20; authorized10,000 shares, ? issued, of which 1,000 shares are held as treasurystock) $ 88,000 Additional Paid-in Capital, Preferred 10,340 CommonStock (no-par; authorized 20,000 shares, issued and outstanding5,200 shares) 478,400 Retained Earnings 22,000 Treasury Stock,1,000 Preferred shares at cost 9,100 Assume that no shares oftreasury stock have been sold in the past. Required: Complete thefollowing statements. (Amounts to be deducted should be indicatedby a minus sign. Round "per share values" to 2 decimal places.)

Complete the following statements. (Amounts to bededucted should be indicated by a minus sign. Round "per sharevalues" to 2 decimal places.)

The number of shares of perferred stock issuedwas

The number of shares of perferred stock outstandingwas

The average issue price of the preffered stockwas

The average issue price of the common stockwas

The treasurey stock transaction increased or decreasedstock equity by

The treasury stock cost

Total stockholders equity is

magentahamster631

Comprehensive The shareholders' equity section of SuperiorCorporation's balance sheet as of December 31, 2012, is as follows:Shareholdersâ Equity Preferred stock, $100 par value; authorized,150,000 shares; issued, 15,000 shares $1,500,000 Common stock, $5par value; authorized, 1,000,000 shares; issued, 200,000 shares1,000,000 Paid-in capital in excess of parâpreferred 75,000 Paid-incapital in excess of parâcommon 425,000 Retained earnings 3,000,000$6,000,000 The following events occurred during 2013: Jan. 5 10,000shares of authorized and unissued common stock were sold for $10per share. Jan. 16 10,000 shares of authorized and unissuedpreferred stock were sold for $108 per share. April 1 80,000 sharesof common stock were repurchased for the treasury at a price of $15per share. Superior uses the cost method to account for treasurystock. Sept. 1 4,000 shares of preferred stock are issued inexchange for a piece of land. The land has an appraised value of$439,000. The preferred stock currently trades on the New YorkStock exchange at a price of $108 per share. Dec. 1 30,000 sharesof treasury stock are reissued at a price of $20 per shareRequired: Hide 1. Prepare journal entries for each of the abovetransactions. For a compound transaction, if an amount box does notrequire an entry, leave it blank. Jan. 5 Cash 100,000 Common Stock50,000 Additional Paid-in Capital on Common Stock 50,000 Jan. 16Cash 1,080,000 Preferred Stock 1,000,000 Additional Paid-in Capitalon Preferred Stock 80,000 April 1 Treasury Stock 1,200,000 Cash1,200,000 Sept. 1 Land 432,000 Preferred Stock 400,000 AdditionalPaid-in Capital on Preferred Stock 32,000 Dec. 1 Cash 600,000Treasury Stock 450,000 Additional Paid-in Capital on Treasury Stock150,000 Hide Feedback Correct Check My Work Feedback When a companyissues common (or preferred) stock for cash, you should record thetotal par value (Number of Shares x Par Value per Share) in theCommon (or Preferred) Stock account, with any excess recorded asAdditional Paid-in Capital. Under the cost method, when thecorporation reacquires its capital stock you should debit anaccount entitled Treasury Stock (and credit Cash or otherappropriate asset accounts) for the cost paid to reacquire theshares. When the corporation reissues the treasury shares, youshould reduce (credit) the Treasury Stock account for the cost ofthe shares reissued and record the difference between the cashreceived and the cost of the reissued shares as an adjustment ofshareholders' equity. If the cash received exceeds the cost of thereissued treasury stock, you should record the excess as anincrease in additional paid-in capital from treasury stock. If thecash is less than the cost, you should record the "deficit" as areduction of additional paid-in capital from treasury stock. If theadditional paid-in capital from treasury stock is insufficient toabsorb the deficit, you should record the remainder as a reductionin retained earnings. If a company issues capital stock forservices or assets other than cash, you should record thetransaction at the fair value of the stock issued or the noncashconsideration received, whichever is more representationallyfaithful. 2. Calculate the number of authorized, issued, andoutstanding common shares as of December 31, 2013. Authorizedcommon shares: 1,000,000 shares Issued shares: 210,000 sharesOutstanding shares: 160,000 shares Hide Feedback Correct Check MyWork Feedback Authorized capital stock is the number of shares ofcapital stock (both preferred and common) that a corporation mayissue as stated in its corporate charter. Issued capital stock isthe number of shares of capital stock that a corporation has issuedto its shareholders as of a specific date. Outstanding capitalstock is the number of shares of capital stock that a corporationhas issued to shareholders and that are still being held byshareholders as of a specific date. 3. Calculate Superior's legalcapital at December 31, 2013.

ACCT 1201 Chapter Notes - Chapter 11: Stock Split, Preferred Stock, Pro Rata

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