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- Title: Duchac Chapter 11 Series A Problems
- Type: Notes
- School: GA Southern
- Course: ACCT 2101
- Term: Spring
11 CHAPTER SERIES A PROBLEMS Prob. 11 1A 1. Year 2003 ................ 2004 ................ 2005 ................ 2006 ................ 2007 ................ 2008 ................ Dividends $40,000 18,000 24,000 27,000 65,000 54,000 $1.20 Preferred Dividends *Arrears dividend, preferred (2004: $12,000; 2005: $6,000; 2006: $3,000) ....... Current dividend, preferred .................................... Total ....................................................................... 2. $21,000 30,000 $51,000 Total Total $30,000 18,000 24,000 27,000 51,000* 30,000 Preferred Dividends Per Share Total $1.20 0.72 0.96 1.08 2.04 1.20 $10,000 0 0 0 14,000 24,000 $7.20 Per Share $ 0.25 0 0 0 0.35 0.60 Comm Average annual dividend for preferred: $1.20 per share ($7.20 6) Average annual dividend for common: $0.20 per share ($1.20 6) 3. a. 6.0% ($1.20 $20) b. 2.5% ($0.20 $8) 11-1 Prob. 11 2A Nov. 5 Cash.................................................................... Mortgage Note Payable ............................... 20 Cash.................................................................... Preferred Stock ............................................ Paid-In Capital in Excess of Par-- Preferred Stock ........................................ 23 Building .............................................................. Land .................................................................... Common Stock ............................................. Paid-In Capital in Excess of Par-- Common Stock ......................................... 780,000 780,000 720,000 600,000 120,000 900,000 120,000 600,000 420,000 11-2 Prob. 11 2A Concluded This solution is applicable only if the General Ledger Software that accompanies the text is used. DIAMOND OPTICS Balance Sheet November 23, 20 Assets Cash ................................................................................. Accounts receivable ....................................................... Merchandise inventory ................................................... Prepaid insurance ........................................................... Supplies ........................................................................... Total current assets ................................................... Land.................................................................................. Building ............................................................................ Total plant assets ...................................................... Total assets ..................................................................... $2,152,223 855,900 2,112,617 197,260 190,900 $ 5,508,900 $1,120,000 3,507,900 4,627,900 $10,136,800 Liabilities Accounts payable............................................................ Total current liabilities .............................................. Mortgage note payable ................................................... Total long-term liabilities .......................................... Total liabilities ................................................................. $ 624,300 $ $ 780,000 780,000 $ 1,404,300 624,300 Stockholders' Equity Common stock ................................................................ Paid-in capital in excess of par--common stock ......... Preferred stock ................................................................ Paid-in capital in excess of par--preferred stock ........ Retained earnings ........................................................... Total stockholders' equity ........................................ Total liabilities and stockholders' equity ...................... $2,400,000 660,000 1,800,000 300,000 3,572,500 8,732,500 $10,136,800 11-3 Problem 11 3A a. Treasury Stock ............................................................... Cash.................................................................... 1,080,000 1,080,000 420,000 360,000 60,000 756,000 700,000 b. Cash ................................................................................ Treasury Stock .................................................. Paid-In Capital from Sale of Treasury Stock ... c. Cash ................................................................................ Preferred Stock .................................................. Paid-In Capital in Excess of Par--Preferred ...................................................................Stock 56,000 920,000 400,000 d. Cash ................................................................................ Common Stock .................................................. Paid-In Capital in Excess of Par--Common ...................................................................Stock e. Cash ................................................................................ Paid-In Capital from Sale of Treasury Stock ............... Treasury Stock .................................................. Retained Earnings ......................................................... Cash Dividends Payable ................................... .................... [(25,000 $2) + (535,000 $0.16)] 520,00 595,000 35,000 630,000 135,600 135,600 f. g. Cash Dividends Payable ............................................... Cash.................................................................... 135,600 135,600 11-4 Prob. 11 3A Concluded This solution is applicable only if the General Ledger Software that accompanies the text is used. ELK RIVER CORPORATION Balance Sheet December 31, 2007 Assets Cash .................................................................... Accounts receivable .......................................... Merchandise inventory ..................................... Prepaid insurance ............................................. Supplies .............................................................. Total current assets .................................... Equipment .......................................................... Accumulated depreciation--equipment ... Building ............................................................... Accumulated depreciation--building ........ Total plant assets .............................................. Total assets ........................................................ $2,090,000 (259,600) $1,830,400 $7,405,000 (972,000) $6,433,000 8,263,400 $16,665,900 $2,223,300 628,950 4,627,650 439,650 482,950 $ 8,402,500 Liabilities Accounts payable .............................................. $ 532,000 Stockholders' Equity Preferred stock .................................................. Paid-in capital in excess of par--preferred stock .............................................................. Common stock ................................................... Paid-in capital in excess of par--common stock .............................................................. Paid-in capital from sale of treasury stock .... Treasury stock ................................................... Retained earnings ............................................. Total stockholders' equity .......................... Total liabilities and stockholders' equity........ $2,500,000 228,500 5,400,000 1,756,000 25,000 (90,000) 6,314,400 16,133,900 $16,665,900 11-5 Prob. 11 4A 1. and 2. Common Stock Jan. 1 Bal. Mar. 15 Aug. 30 600,000 200,000 16,000 816,000 Paid-In Capital in Excess of Stated Value Jan. 1 Bal. 150,000 Mar. 15 280,000 July 30 24,000 454,000 Retained Earnings 40,000 Jan. 1 Bal. 38,300 Dec. 31 July 30 Dec. 30 497,750 182,500 601,950 Jan. 1 Bal. Oct. 10 Treasury Stock 120,000 Feb. 2 105,000 105,000 120,000 Paid-In Capital from Sale of Treasury Stock Feb. 2 30,000 Aug. 30 Stock Dividends Distributable 16,000 July 30 16,000 11-6 Prob. 11 4A 2. Jan. Continued 31,500 19 Cash Dividends Payable .............................. .......................................................... Cash 2 Cash .............................................................. Stock .........................................Treasury .... Paid-In Capital from Sale of Treasury .....................................................Stock 31,500 150,000 Feb. 120,00 30,000 480,000 Mar. 15 Cash .............................................................. ........................................ Common Stock ........Paid-In Capital in Excess of Stated ..................................................... Value July 30 Retained Earnings ........................................ ................Stock Dividends Distributable ........Paid-In Capital in Excess of Stated ..................................................... Value *(60,000 + 20,000) 2% $25 Aug. 30 Stock Dividends Distributable .................... ........................................ Common Stock Oct. 10 Treasury Stock ............................................. .......................................................... Cash 200,00 280,00 40,000* 16,000 24,000 16,000 16,000 105,000 105,00 38,300** Dec. 30 Retained Earnings ........................................ ......................... Cash Dividends Payable **(60,000 + 20,000 + 1,600 5,000) $0.50 38,300 11-7 Prob. 11 4A 3. Continued AEROTRONICS ENTERPRISES INC. Retained Earnings Statement For the Year Ended December 31, 2007 Retained earnings (beginning of period) ...................... Net income ...................................................................... Less: Cash dividends ..................................................... Stock dividends.................................................... Increase in retained earnings ........................................ Retained earnings (end of period)................................. 4. Stockholders' Equity Paid-in capital: Common stock, $10 stated value (100,000 shares authorized, 81,600 shares issued) ..................... Excess of issue price over stated value ................. From sale of treasury stock ..................................... Total paid-in capital ............................................ Retained earnings .......................................................... Total ........................................................................... Deduct treasury stock (5,000 shares at cost) .............. Total stockholders' equity ............................................ $497,750 $182,500 (38,300) (40,000) 104,200 $601,950 $ 816,000 454,000 30,000 $1,300,000 601,950 $1,901,950 105,000 $1,796,950 11-8 Prob. 11 4A Concluded This solution is applicable only if the General Ledger Software that accompanies the text is used. AEROTRONICS ENTERPRISES INC. Balance Sheet December 31, 2007 Assets Cash ................................................................................. Accounts receivable ....................................................... Merchandise inventory ................................................... Prepaid insurance ........................................................... Supplies ........................................................................... Total current assets ................................................... Land.................................................................................. Equipment ........................................................................ Accumulated depreciation--equipment ........................ Total plant assets ...................................................... Total assets ..................................................................... $ 615,500 426,325 584,550 75,225 101,945 $1,803,545 $ 365,400 180,400 (112,095) 433,705 $2,237,250 Liabilities Accounts payable............................................................ Cash dividends payable ................................................. Total liabilities ................................................................. $ 357,500 82,800 $ 440,300 Stockholders' Equity Common stock ................................................................ Paid-in capital in excess of stated value ...................... Paid-in capital from sale of treasury stock ................... Retained earnings ........................................................... Treasury stock ................................................................. Total stockholders' equity ........................................ Total liabilities and stockholders' equity ...................... $ 816,000 454,000 30,000 601,950 (105,000) 1,796,950 $2,237,250 11-9 Prob. 11 5A Jan. 8 No entry required. The stockholders' ledger would be revised to record the increased number of shares held by each stockholder. 20 Retained Earnings ............................................. Cash Dividends Payable .............................. *(20,000 $1) + (600,000 $0.14) Apr. 20 Cash Dividends Payable ................................... Cash .............................................................. 8 Treasury Stock .................................................. Cash .............................................................. 2 Cash.................................................................... Treasury Stock ............................................. Paid-In Capital from Sale of Treasury ....... Stock ......................................................... 104,000 104,000 2,400,000 2,400,000 1,680,000 1,440,000 240,000 60,600* 60,600 104,000* 104,000 Mar. May Aug. Sept. 15 Retained Earnings ............................................. Cash Dividends Payable .............................. *(20,000 $1) + [(600,000 20,000) $0.07] 15 Retained Earnings ............................................. Stock Dividends Distributable .................... Paid-In Capital in Excess of Par-- Common Stock ....................................... **(600,000 20,000) 1% $52 301,600** 34,800 266,800 We assumed the treasury stock received no stock dividend. While this is the predominant practice, there is a diversity of stock dividend treatments regarding treasury stock, depending upon state statutes and treasury stock purposes. Oct. 15 Cash Dividends Payable ................................... Cash .............................................................. 15 Stock Dividends Distributable.......................... Common Stock ............................................. 60,600 60,600 34,800 34,800 11-10 Prob. 11 5A Concluded This solution is applicable only if the General Ledger Software that accompanies the text is used. SERRA DO MAR CORPORATION Balance Sheet December 31, 20-- Assets Cash ................................................................................. Accounts receivable ....................................................... Merchandise inventory ................................................... Prepaid insurance ........................................................... Office supplies ................................................................ Equipment ........................................................................ Accumulated depreciation--equipment ........................ Total assets ..................................................................... $ 548,510 219,885 505,642 121,666 23,203 $ 342,775 (111,625) 231,150 $1,650,056 Liabilities Accounts payable............................................................ $ 188,755 Stockholders' Equity Common stock ................................................................ Paid-in capital in excess of par--common stock ......... Paid-in capital from sale of treasury stock ................... Retained earnings ........................................................... Treasury stock................................................................. Total stockholders' equity ........................................ Total liabilities and stockholders' equity ...................... $ 34,800 266,800 240,000 1,879,701 (960,000) 1,461,301 $1,650,056 11-11
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