Prepare the appropriate entries for the given events

Assignment Help Accounting Basics

Reference no: EM131975586

Problem

The shareholders' equity section of the balance sheet of National Foods, Inc. included the following accounts at December 31, 2016: Common stock, 120 million shares at $1 par 120 Paid in capital in excess of par, common 836 Retained earnings 2,449 Total Shareholders' Equity 3,405 During 2017, the following transactions affected the stock of National Foods: (a) On March 11, National Foods issued 10 million of its 9.2% preferred shares, $1 par value per share, for $44 per share. (b) On November 22, 1 million common shares, $1 par value per share, were issued in exchange for eight labeling machines. Each machine was built to custom specifications so no cash price was available. National Food's stock was listed at $10 per share. (c ) On November 23, 1 million of the common shares and 1 million preferred shares were sold for $60 million. The preferred shares had not traded since March and their market value was uncertain.

Required:

1. Prepare the appropriate entries for these events.

2. Prepare the shareholders' equity section of the comparative balance sheets for National Foods at December 31, 2017 and 2016. Assume that net income for 2017 was $400 million and the only other transaction affecting shareholders' equity was the payment of the 9.2% dividend on the 11 million preferred shares.

Reference no: EM131975586

Questions Cloud

Compute the total overhead variance : Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $49,000, Compute the total overhead variance

Compute the value of sailsboro common stock today : Stockholders require a return of 10 percent to invest in Sailsboro's common stock. Compute the value of Sailsboro's common stock today

What is the return on assets for given year : A firm's after-tax operating income was $1,000,000 and after-tax interest expense was $200,000 in 2013. It started the year with $5,000,000 in equity financing.

Implicit after-tax interest rate on the operating : If the return on operating assets (ROOA) is 7%, the return on net operating assets (RNOA) is 10%, net operating assets are $265, and operating liabilities

Prepare the appropriate entries for the given events : The shareholders' equity section of the balance sheet of National Foods, Inc. included the following accounts. Prepare the appropriate entries for these events.

Annual equivalent cost of replacing the vehicle : What is the annual equivalent cost of replacing the vehicle every 5 years? Assume your cost of capital is 10.5%. Enter your answer to the nearest cent.

Determine the common-size statement value of inventory : A firm has sales of $1,040, net income of $226, net fixed assets of $495, and current assets of $321. The firm has $102 in inventory.

What is the security price : Consider a security with a face value of $100 000 to be repaid at maturity. The maturity of the security is three years. The coupon rate is 9% per

What is the net ordinary gain or loss from these transaction : Shan had the following gains and losses from Sec 1231 properties in 2014. What is the net ordinary gain or loss from these transactions?

User Account

All Pages