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Problems 11 - 3A and 8A solutions

Accounting: Tools for Business Decision Making

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PROBLEM 11-3A PEPP COMPANY Partial Balance Sheet December 31, 2007 Stockholders’ equity Paid-in capital Capital stock 8% Preferred stock, $100 par value, cumulative, 100,000 shares issued and outstanding ................................ $10,000,000 Common stock, $5 par value, 1,300,000 shares issued and 1,285,000 shares outstanding .......... 6,500,000 Total capital stock ................................ $16,500,000 Additional paid-in capital In excess of par value— preferred stock .................................. 900,000 In excess of par value— common stock ................................... 1,800,000 Total additional paid-in capital .... 2,700,000 Total paid-in capital ...................... 19,200,000 Retained earnings ............................................... 2,458,000 * Total paid-in capital and retained earnings ....................... 21,658,000 Less: Treasury stock-common (15,000 shares) ................................................. (165,000 ) Total stockholders’ equity ........... $21,493,000 *$1,200,000 + $3,600,000 – $1,542,000 a – $800,000
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a 1,300,000 shares issued less 15,000 shares in treasury = 1,285,000 shares; outstanding; 1,285,000 X $1.20 = $1,542,000.
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*PROBLEM 11-8A (a) Jan. 15 Retained Earnings (60,000 X $0.5) .... 30,000 Dividends Payable ....................... 30,000 Feb. 15 Dividends Payable .............................. 30,000 Cash .............................................. 30,000 Apr. 15 Retained Earnings (6,000 X $14) ....... 84,000 Common Stock Dividends Distributable (6,000 X $10) ...... 60,000 Paid-in Capital in Excess of Par Value (6,000 X $4)
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