Reference no: EM131192533
DeLong Corp was organized on Jan 1, 2014. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no- par common stock with a stated value of $2 per share. The following stock transactioons were completed during the first year.
Jan 10: Issued 80,000 shares of common stock for cash at $4 per share
Mar 1: Issued 5,000 shares of preferred stock for cash at $105 per share
Apr 1: Issued 24,000 shares of common stock for land. The asking price of the land was $90,000. The fair value of the land was $85,000
May 1: Issued 80,000 shares of common stock for cash at $4.50 per share
Aug 1: Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000 for services performed in helping the company organize
Sept 1: Issued 10,000 shares of common stock for cash at $5 per share.
Nov 1: Issued 1,000 shares of preferred stock for cash at $109 per share
Instructions: Post to the stockholders equity accounts. (Use J5 as the posting reference )
|
Corporations can do tax planning to minimize tax liability
: Identify two areas on Form 1120 where corporations can do tax planning to minimize tax liability. Examples include Dividends Received Deduction, Net Operating Losses, and Charitable Contributions.
|
|
Incurred research and development cost to develop a patent
: For each of the following items, identify whether they are a Capital Expenditure or an Expense: Built a new elevator in the office building. Acquired a trademark. Incurred research and development cost to develop a patent. Modified a machine, thus ex..
|
|
Offered two different salary arrangements
: You have been offered two different salary arrangements. You can have $149,000 per year for the next two years, or you can have $55,000 per year for the next two years, along with a $35,000 signing bonus today. If the interest rate is 6 percent compo..
|
|
Investors tend to use a higher discount rate to value stocks
: Investors tend to use a higher discount rate to value stocks compared to the discount rate they use to value bonds. Why do you think this is the case? Under what circumstances might an investor use a higher discount rate to value a particular bond co..
|
|
Stock transactioons were completed during the first year
: DeLong Corp was organized on Jan 1, 2014. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no- par common stock with a stated value of $2 per share. The following stock transactioons were completed ..
|
|
Higher interest rate than bond not backed by collateral
: If the risk of repayment on a bond suddenly increases what will happen to the price of the bond today? How would a decrease of inflation expectations affect the price of a bond today? If a bond is backed by collateral (a "secured" bond) would you exp..
|
|
How are the shareholders taxed on the distributions
: On January 1, 2015, Kinney, Inc., an S Corporation, reports $4,000 of accumulated E&P and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney’s stock. Kinney distributes $6,000 to each shar..
|
|
Calculate the cash flow from assets-cash flow to creditors
: Use the following information for Ingersoll, Inc., (assume the tax rate is 30 percent): 2013 2014 Sales $ 15,573 $ 15,336 Depreciation 1,741 1,816 Cost of goods sold 4,379 4,787. calculate the cash flow from assets, cash flow to creditors, and cash f..
|
|
Representative of reputable financial services
: A representative of a reputable financial services company has approached you as manager of a four-person of anesthesiologists with an opportunity to purchase a 10-year annuity due for each member of the group. The annuity due would pay $40,000 each ..
|