Chapter 15 Quiz Solutions

Chapter 15 Quiz Solutions - share. On May 15, 2009, they...

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Name: ___________________________________________ ACCT 304 - Fall 2009 – Chapter 15 Quiz Instructions: Please show all work. Please write your answer CLEARLY. 1. (4 points) Parker Corporation issued 2,000 shares of common stock and 400 shares of preferred stock for a lump sum of $72,000 cash. The par value of the common stock was $5 and the market value was $30. The par value of the preferred stock was $40 and the market value was $50. Give the correct entry to record the issuance of this lump sum sale. Common Stock: 2000 shares x $30 = $60,000 6/8 x $72,000 = $54,000 allocated to CS Preferred Stock: 400 shares x $50 = $20,000 2/8 x $72,000 = $18,000 allocated to PS Total Market Value: $80,000 Dr. Cash $72,000 Cr. Common Stock @ par (2000 x $5) $10,000 Cr. Additional PIC – CS ($54,000-$10,000) $44,000 Cr. Preferred Stock @ par (400 x $40) $16,000 Cr. Additional PIC – CS ($18,000-$16,000) $2,000 2. (4 points) On January 1, 2009, Lane Company issued 1,000 shares of $1 par common stock for $20 per
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Unformatted text preview: share. On May 15, 2009, they reacquired 200 shares of this common stock for $25 per share. Prepare the journal entries for each of these transactions: January 1, 2009: Dr. Cash (1000 x $20) $20,000 Cr. Common Stock @ par (1000 x $1) $1,000 Cr. Additional PIC – CS ($20,000-$1,000) $19,000 May 15, 2009: Dr. Treasury Stock (200 x $25) $5,000 Cr. Cash $5,000 3. (2 points) A corporation was organized in January 2007 with authorized capital of $10 par value common stock. On March 1, 2010, the corporation's attorney accepted 7,000 shares of common stock in settlement for legal services that had been performed with a fair value of $90,000. Prepare the correct journal entry. Dr. Organization (or Legal) Expense $90,000 Cr. Common Stock @ par (7000 x $10) $70,000 Cr. Additional PIC – CS ($90,000-$70,000) $20,000...
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This note was uploaded on 11/30/2009 for the course ACCT 10022 taught by Professor Brink during the Fall '09 term at VCU.

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