chapter11probsetc

# chapter11probsetc - PROBLEM SET C PROBLEM 11-1C Goodly Sum...

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PROBLEM SET C PROBLEM 11-1C Goodly Sum is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations: a. Cash 195,000 Common Stock, \$20 Par Value 150,000 Contributed Capital in Excess of Par Value, Common Stock 45,000 b. Patent 52,000 Common Stock, \$20 Par Value 40,000 Contributed Capital in Excess of Par Value, Common Stock 12,000 c. Cash 21,000 Land 85,000 Building 160,000 Mortgage Payable 70,000 Common Stock, \$20 Par Value 140,000 Contributed Capital in Excess of Par Value, Common Stock 56,000 d. Cash 140,000 Common Stock, \$20 Par Value 100,000 Contributed Capital in Excess of Par Value, Common Stock 40,000 Required 1. Explain each journal entry a through d . 2. How many shares of common stock are outstanding at year-end? 3. What is the amount of minimum legal capital (based on par value) at year-end? 4. What is the total contributed capital at year-end? 5. What is the book value per share of the common stock at year-end if contributed capital plus retained earnings equals \$767,550? PROBLEM 11-2C

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JFW Corporation reports the following components of stockholders’ equity on December 31, 2005: Common stock — \$10 par value, 50,000 shares authorized, 30,000 shares issued and outstanding \$300,000 Contributed capital in excess of par value, common stock 140,000 Retained earnings 330,000 Total stockholders’ equity \$770,000 In year 2006, the following transactions affect its stockholders’ equity accounts: Jan. 2 Purchased 2,500 shares of its own stock at \$16 per share. Jan. 9 Directors declared a \$5.00 per share cash dividend payable on Feb. 15 to the Feb. 5 stockholders of record. Feb.15 Paid the dividend declared on January 9. July 16 Sold 1,000 of the treasury shares at \$20 per share. Aug.12 Sold 1,500 of the treasury shares at \$12 per share. Sept.4 Directors declared a \$5.00 per share cash dividend payable on October 18 to the September 25 stockholders of record. Oct.18 Paid the dividend declared on September 4. Dec.31 Closed the \$128,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required 1. Prepare journal entries to record the transactions and closings for 2006. 2. Prepare a statement of retained earnings for the year ended December 31, 2006. 3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2006. PROBLEM 11-3C At March 30, the end of Wizwhiskey Company’s first quarter, the following stockholders’ equity accounts appear: Common stock, \$10 par value \$150,000 Contributed capital in excess of par value, common stock 75,000 Retained earnings 420,000 In the second quarter, the following entries related to its equity accounts are recorded: April 2 Retained Earnings 90,000 Common Dividend Payable 90,000 April 25 Common Dividend Payable 90,000 Cash 90,000 April 30 Retained Earnings 42,000 Common Stock Dividend Distributable 30,000
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chapter11probsetc - PROBLEM SET C PROBLEM 11-1C Goodly Sum...

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