Reference no: EM133132992

Questions -

Q1. Entries for Stock Dividends - Madrid Corporation has 11,000 shares of $20 par common stock outstanding. On June 8, Madrid Corporation declared a 3% stock dividend to be issued August 12 to stockholders of record on July 13. The market price of the stock was $26 per share on June 8.

Journalize the entries required on June 8, July 13, and August 12. If no entry is required, select "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank

Q2. Entries for Treasury Stock - On May 27, Kick Off Inc. reacquired 8,000 shares of its common stock at $20 per share. On August 3, Kick Off sold 4,200 of the reacquired shares at $23 per share. On November 14, Kick Off sold the remaining shares at $19 per share.

Journalize the transactions of May 27, August 3, and November 14. If an amount box does not require an entry, leave it blank.

Q3. Reporting Stockholders' Equity - Using the following accounts and balances, prepare the Stockholders' Equity section of the balance sheet using Method 1 of Exhibit 8. 30,000 shares of common stock authorized, and 1,000 shares have been reacquired.

Common Stock, $40 par $840,000

Paid-In Capital from Sale of Treasury Stock 34,000

Paid-In Capital in Excess of Par-Common Stock 231,000

Retained Earnings 386,000

Treasury Stock 20,000

Q4. Retained Earnings Statement - Honey Mill Cameras Inc. reported the following results for the year ended October 31, 20Y9:

Retained earnings, November 1, 20Y8 $881,000

Net income 255,500

Cash dividends declared 20,000

Stock dividends declared 52,000

Prepare a retained earnings statement for the fiscal year ended October 31, 20Y9.

Q5. Earnings Per Share - Financial statement data for the years ended December 31 for Cottontop Corporation follow:

	20Y3	20Y2
Net income	$801,250	$700,250
Preferred dividends	$122,000	$122,000
Average number of common shares outstanding	55,000 shares	45,000 shares

Determine the earnings per share for 20Y3 and 20Y2.

Q6. Entries for Cash Dividends - The declaration, record, and payment dates in connection with a cash dividend of $19,100 on a corporation's common stock are January 12, March 13, and April 12.

If no entry is required, select "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

Q7. Effect of Stock Split - Yeoman Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Yeoman Grill Restaurant Corporation, which had 69,000 shares of common stock outstanding, declared a 2-for-1 stock split.

a. What will be the number of shares outstanding after the split?

b. If the common stock had a market price of $132 per share before the stock split, what would be an approximate market price per share after the split?

Q8. Treasury Stock Transactions - Lava Lake Inc. bottles and distributes spring water. On February 11 of the current year, Lava Lake reacquired 4,200 shares of its common stock at $80 per share. On April 30, Lava Lake Inc. sold 2,900 of the reacquired shares at $86 per share. On August 22, Lava Lake Inc. sold 1,300 shares at $77 per share.

a. Journalize the transactions of February 11, April 30, and August 22. If an amount box does not require an entry, leave it blank.

b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

Q9. Treasury Stock Transactions - Yard Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Yard Spray Inc. reacquired 10,300 shares of its common stock at $41 per share. On June 14, 6,500 of the reacquired shares were sold at $44 per share, and on November 23, 2,500 of the reacquired shares were sold at $46.

a. Journalize the transactions of January 31, June 14, and November 23. If an amount box does not require an entry, leave it blank.

b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

c. What is the balance in Treasury Stock on December 31 of the current year?

Q10. Treasury Stock Transactions - Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 2,600 shares of its common stock at $61 per share. On September 6, Biscayne Bay Water Inc. sold 2,100 of the reacquired shares at $64 per share. The remaining 500 shares were sold at $57 per share on November 30.

a. Journalize the transactions of May 14, September 6, and November 30. If an amount box does not require an entry, leave it blank.

b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

Q11. Reporting Paid-In Capital - The following accounts and their balances were selected from the adjusted trial balance of Block Ayala Group Inc., a freight forwarder, at October 31, the end of the current fiscal year:

Common Stock, no par, $14 stated value $840,000

Paid-In Capital from Sale of Treasury Stock 437,900

Paid-In Capital in Excess of Par-Preferred Stock 84,960

Paid-In Capital in Excess of Stated Value-Common Stock 2,016,000

Preferred 2% Stock, $120 par 708,000

Retained Earnings 5,395,000

Prepare the Paid-In Capital portion of the Stockholders' Equity section of the balance sheet using Method 1 of Exhibit 8. There are 190,000 shares of common stock authorized and 16,000 shares of preferred stock authorized.

Q12. Stockholders' Equity Section of Balance Sheet - The following accounts and their balances appear in the ledger of Goodale Properties Inc. on June 30 of the current year:

Common Stock, $15 par $423,000

Paid-In Capital from Sale of Treasury Stock 17,400

Paid-In Capital in Excess of Par-Common Stock 11,280

Retained Earnings 664,000

Treasury Stock 8,740

Prepare the Stockholders' Equity section of the balance sheet as of June 30 using Method 1 of Exhibit 8. Eighty thousand shares of common stock are authorized, and 460 shares have been reacquired.

Q13. Retained Earnings Statement - Pressure Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended January 31, 20Y2:

Retained earnings, February 1, 20Y1 $412,300

Net income 49,500

Cash dividends declared 8,900

Stock dividends declared 16,800

Prepare a retained earnings statement for the fiscal year ended January 31, 20Y2.

Q14. Stockholders' Equity Section of Balance Sheet - The following Stockholders' Equity section of the balance sheet prepared as of the end of the current year:

Stockholders' Equity
Paid-in capital:
Preferred 2% stock, $60 par (94,000 shares authorized and issued)	$5,640,000
Excess of issue price over par	375,000	$6,015,000
Retained earnings		72,525,000
Treasury stock (56,000 shares at cost)		868,000
Dividends payable		323,000
Total paid-in capital		$79,731,000
Common stock, $10 par (750,000 shares authorized, 619,000 shares issued)		6,623,000
Organizing costs		225,000
Total stockholders' equity		$86,579,000

Prepare a corrected Stockholders' Equity section. Use the minus sign to indicate any values that are deducted on the statement.

Q15. EPS - PickApart Arts, Inc., had earnings of $289,000 for the year. The company had 39,000 shares of common stock outstanding during the year and issued 3,400 shares of $100 par value preferred stock. The preferred stock has a dividend of $7 per share. There were no transactions in either common or preferred stock during the year.

Determine the basic earnings per share for PickApart Arts for the year. Round answer to two decimal places.

Q16. Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years:

	Dakota		Jersey
	Year 2	Year 1	Year 2	Year 1
Net income	$2,117	$3,725	$1,915	$3,237
Average number of common shares outstanding	594	599	334	363

a. Determine the earnings per share in Year 2 and Year 1 for each company. Neither Dakota nor Jersey have any preferred stock outstanding. Round your answers to two decimal places.

Q17. Dividend Per Share - Seacrest Company has 10,000 shares of cumulative preferred 3% stock, $150 par and 50,000 shares of $5 par common stock. The following amounts were distributed as dividends:

Year 1 $67,500

Year 2 36,000

Year 3 135,000

Determine the dividend per share for preferred and common stock for each year.

Q18. Entries for Issuing Stock - On January 22, Shamrock Corporation issued for cash 26,000 shares of no-par common stock at $35. On February 14, Shamrock issued at par value 6,000 shares of preferred 6% stock, $75 par for cash. On August 30, Shamrock Corporation issued for cash 23,000 shares of preferred 6% stock, $75 par at $86.

Journalize the entries to record the January 22, February 14, and August 30 transactions. If an amount box does not require an entry, leave it blank.

Q19. Dividends Per Share - Internal Insights Inc., a developer of radiology equipment, has stock outstanding as follows: 21,000 shares of cumulative preferred 4% stock, $120 par, and 70,000 shares of $20 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $67,620; second year, $143,980; third year, $176,120; fourth year, $198,100.

Compute the dividend per share on each class of stock for each of the four years. R

Q20. Lightfoot Inc., a software development firm, has stock outstanding as follows: 25,000 shares of cumulative preferred 4% stock, $25 par, and 31,000 shares of $125 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $9,500; second year, $15,750; third year, $75,170; fourth year, $111,490.

Calculate the dividend per share on each class of stock for each of the four years.

Q21. Entries for Issuing Par Stock - On October 31, Pidgeon Stones Inc., a marble contractor, issued for cash 130,000 shares of $4 par common stock at $8, and on November 19, it issued for cash 25,000 shares of preferred stock, $12 par at $41.

a. Journalize the entries for October 31 and November 19. If an amount box does not require an entry, leave it blank.

b. What is the total amount invested (total paid-in capital) by all stockholders as of November 19?

Q22. Entries for Issuing No-Par Stock - On February 12, Quality Carpet Inc., a carpet wholesaler, issued for cash 250,000 shares of no-par common stock (with a stated value of $3) at $12, and on August 3, it issued for cash 20,000 shares of preferred stock, $70 par at $76.

a. Journalize the entries for February 12 and August 3, assuming that the common stock is to be credited with the stated value. If an amount box does not require an entry, leave it blank.

b. What is the total amount invested (total paid-in capital) by all stockholders as of August 3?

Q23. Issuing Stock for Assets Other Than Cash - On April 5, Fenning Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 15,000 shares of $15 par common stock valued at $20 per share.

Journalize the entry to record the transaction. If an amount box does not require an entry, leave it blank.

Q24. Selected Stock Transactions - Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter authorized 250,000 shares of common stock with a par of $40. The following transactions affecting stockholders' equity were completed during the first year of operations.

Journalize the entries to record the transactions.

a. Issued 9,500 shares of stock at par to Paul Glenn for cash. If an amount box does not require an entry, leave it blank.

b. (1) Issued 600 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and (2) issued 19,000 shares of stock at par to Michele Kirby for cash. If an amount box does not require an entry, leave it blank.

c. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $379,000 for 20 years at 7% and there is accrued interest of $7,000 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $168,000 and the building at $565,000 and that Gretchen Northway's equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest. If an amount box does not require an entry, leave it blank.

Q25. Issuing Stock - Willow Creek Nursery, with an authorization of 26,000 shares of preferred stock and 380,000 shares of common stock, completed several transactions involving its stock on October 1, the first day of operations. The trial balance at the close of the day follows:

Cash	371,200
Land	72,000
Buildings	146,400
Preferred 2% Stock, $100 par		210,000
Paid-In Capital in Excess of Par-Preferred Stock		8,400
Common Stock, $40 par		256,000
Paid-In Capital in Excess of Par-Common Stock		115,200
	589,600	589,600

All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.

Journalize the entries to record the (1) common and (2) preferred stock transactions summarized in the trial balance. If an amount box does not require an entry, leave it blank.

Q26. Issuing Stock - Ergonomics Supply Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 100,000 shares of 3% preferred stock, $55 par and 600,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

July 1. Issued 80,000 shares of common stock at par for cash. If an amount box does not require an entry, leave it blank.

July 1 Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. If an amount box does not require an entry, leave it blank.

Aug. 7. Issued 17,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $32,000, $174,000, and $39,000, respectively. If an amount box does not require an entry, leave it blank.

Sept. 20. Issued 30,000 shares of preferred stock at $63 for cash. If an amount box does not require an entry, leave it blank.