Ch 11 - CHAPTER 11 BRIEF EXERCISE 11-1 The advantages and...

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Unformatted text preview: CHAPTER 11 BRIEF EXERCISE 11-1 The advantages and disadvantages of a corporation are as follows: Advantages Disadvantages Separate legal existence Organizational structure Limited liability of stockholders separation of ownership and Transferable ownership rights management Ability to acquire capital Government regulations Continuous life Additional taxes Organizational structure professional management BRIEF EXERCISE 11-4 Cash (5,000 X $108)...................................................... 540,000 Preferred Stock (5,000 X $100)............................ 500,000 Paid-in Capital in Excess of Par Value Preferred Stock (5,000 X $8)............................. 40,000 BRIEF EXERCISE 11-5 Nov. 1 Dividends (7,000 X $1)............................... 7,000 Dividends Payable.............................. 7,000 Dec. 31 Dividends Payable..................................... 7,000 Cash..................................................... 7,000 BRIEF EXERCISE 11-6 Before After Dividend Dividend (a) Stockholders equity Paid-in capital Common stock, $10 par $1,000,000 $1,100,000 In excess of par value 90,000 Total paid-in capital 1,000,000 1,190,000 Retained earnings 400,000 210,000 Total stockholders equity $1,400,000 $1,400,000 (b) Outstanding shares 100,000 110,000 11-1 BRIEF EXERCISE 11-8 Stockholders equity Paid-in capital Capital stock Common stock, $10 par value, 5,000 shares issued and 4,500 shares outstanding $50,000 Additional paid-in capital In excess of par valuecommon stock 18,000 Total paid-in capital 68,000 Retained earnings 32,000 Total paid-in capital and retained earnings 100,000 Less: Treasury stockcommon (500 shares) 12,000 Total stockholders equity $88,000 EXERCISE 11-2 June 12 Cash......................................................... 300,000 Common Stock (60,000 X $1)......... 60,000 Paid-in Capital in Excess of Par ValueCommon Stock............... 240,000 July 11 Cash (1,000 X $104)................................ 104,000 Preferred Stock (1,000 X $100)...... 100,000 Paid-in Capital in Excess of Par ValuePreferred Stock............... 4,000 (1,000 X $4) Nov. 28 Treasury Stock........................................ 11,000 Cash.................................................. 11,000 11-2 EXERCISE 11-5...
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Ch 11 - CHAPTER 11 BRIEF EXERCISE 11-1 The advantages and...

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