Give the entries necessary to record the valuations for

Reference no: EM13582251

A) Bennet Company paid cash dividends totaling $150,000 in 2006 and $75,000 in 2007. In 2008, Bennett intends to pay cash dividends of $800,000. Compute the amount of cash dividends per share to be received by common stockholders in 2008 under each of the following assumptions. Treat each case independently. There were no dividends in arrears as of January 1, 2006.

1. 25,000 shares of common; 100,000 shares of 6 percent, $50 par cumulative

2. 25,000 shares of common; 50,000 shares of 6 percent, $50 par noncumulative

3. 25,000 shares of common; 70,000 shares of 6 percent, $100 par cumulative

B) Webster Inc. carries the following marketable equity securities on its books at Dec 31, 2007, and 2008. All securities were purchased during 2007 and there were no beginning balances in any market adjustment accounts.

Trading Securities:

Cost Market Dec 31, 2007 Market Dec 31, 2008

V Company 50,000 26,000 40,000

W Company 26,000 40,000 40,000

X Company 70,000 60,000 50,000

Total 146,000 126,000 130,000

Available for Sale Securities:

Y Company 420,000 360,000 200,000

Z Company 100,000 120,000 240,000

Total 520,000 480,000 440,000

The Cost method is used in accounting for all investments in securities.

1. Give the entries necessary to record the valuations for both trading and available for sale securities at Dec 31, 2007 and 2008

2. What net effect would these valuations have on 2007 and 2008 net income?

C) On January 2, 2005 the Wilcox Studios leased six computers for use in the engineering department. The lease period is for 13 years and the estimated economic life of the leased property is 15 years. The lease does not contain automatic title transer or a bargin purchase option. Lease payments are $9,000 per year, payable each Dec 31. The incremental borrowing rate for Wilcox is 12 percent and the implicit interest rate (known by Wilcox) is 10 percent. The company uses straight-line depreciation for this type of equipment.

Provide the necessary journal entries to record the transactions for Wilcox for the period January 2, 2005 through Dec 31, 2006

Reference no: EM13582251

Questions Cloud

Design a chart of accounts for s dilley amp company explain : ollie mace has recently been appointed controller of s. dilley amp company a family-owned manufacturing firm founded 28

Inman manufacturing company makes a product that it sells : inman manufacturing company makes a product that it sells for 60 per unit. the company incurs variable manufacturing

Explain why unlimited liability is an advantages of a : explain why unlimited liability is an advantages of a corporation. what are some other advantages and disadvantages of

Use the following information for first corp complete the : use the following information for first corp. complete the statement of cash flows indirect method for the year ended

Give the entries necessary to record the valuations for : a bennet company paid cash dividends totaling 150000 in 2006 and 75000 in 2007. in 2008 bennett intends to pay cash

Hoen manufacturing company experienced the following : hoen manufacturing company experienced the following accounting events during its first year of operation. with the

Joan corp sold office equipment on january 12009 for a cash : joan corp sold office equipment on january 12009 for a cash price of 430000. the equipment had a cost of 500000 and

A factory machine was purchased for 60000 on january 1 2010 : a factory machine was purchased for 60000 on january 1 2010. it was estimated that it would have a 12000 salvage value

Webster training services wts provides instruction on the : webster training services wts provides instruction on the use of computer software for the employees of its corporate

User Account

All Pages