121_09A - Question 1 Eagle corporation filed a corporate...

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Unformatted text preview: Question 1 Eagle corporation filed a corporate charter authorizing 100,000 shares of common stock with a par value of $0.50 per share. Record the following journal entries for 2011. A B Account names Debit Credit Cash 75,000 Common stock 2,500 Paid-in-capital in excess of par 72,500 Issued 5,000 shares of common stock at $15 per share Cash 136,000 Common stock Paid-in-capital in excess of par Issued 8,000 shares of common stock at $17 per share 4,000 132,000 Assume retained earnings were $80,000. Prepare the stockholders’ equity section of the balance sheet. Stockholders’ equity Common stock, $0.50 par value, 100,000 shares authorized, 13,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity What did you learn? Chapter 9 – Page 1 of 12 6,500 204,500 211,000 80,000 291,000 Question 2 Review the stockholders’ equity section of Costco and complete the following tables. Par value common stock Shares authorized Shares issued, end of current year Shares issued, end of previous year Shares issued during year Common stock Additional paid-in capital Total paid-in capital Retained earnings $0.005 1,800,000,000 451,754,000 447,297,000 4,457,000 Current 2,259 1,125,543 1,127,802 3,928,748 Previous 2,236 1,028,414 1,030,650 3,326,659 Change 23 97,129 97,152 602,089 Assume the change in par value of stock issued and additional paidin capital was caused by issuing new stock. Record the journal entry. Account names Cash Common stock Additional paid-in capital Debit Credit 97,152 23 97,129 Assume there were no dividends for the year. What was the amount of net income for the year? 602,089 For the following two calculations express shares in thousands. Calculate the average issue price of stock issued during the year. Cash received 97,152 = = 21.80 Shares issued 4,457 Calculate the average issue price of all stock issued. Cash received 1,127,802 = 451,754 Shares issued What did you learn? Chapter 9 – Page 2 of 12 = 2.50 Question 3 Raven corporation filed a corporate charter authorizing 50,000 shares of 5% preferred stock with a par value of $50 and 250,000 shares of common stock with a par value of $0.75 per share. Record the following journal entries for 2011. A B C Account names Debit Credit Cash 520,000 Preferred stock 500,000 PIC x/Par − Preferred stock 20,000 Issued 10,000 shares of preferred stock at $52 per share Cash 420,000 Common stock PIC x/Par − Common stock Issued 20,000 shares of common stock at $21 per share 15,000 405,000 Cash 100,000 Common stock 3,750 PIC x/Par − Common stock 96,250 Issued 5,000 shares of common stock for land, FMV $100,000 Assume retained earnings were $2,000,000. Prepare the stockholders’ equity section of the balance sheet. Stockholders’ equity Preferred stock, $50 par value, 5%, 50,000 shares authorized, 10,000 shares issued Paid-in capital in excess of par - preferred Common stock, $0.75 par value, 250,000 shares authorized, 25,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity What did you learn? Chapter 9 – Page 3 of 12 500,000 20,000 18,750 501,250 1,040,000 2,000,000 3,040,000 Question 4 Falcon corporation had the following equity section. Stockholders’ equity Common stock, $0.10 par value, 1,000,000 shares authorized, 200,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity 20,000 1,580,000 1,600,000 3,000,000 4,600,000 Record the following journal entries. Account names Debit Credit A Treasury stock 120,000 Cash 120,000 Purchased 6,000 shares of treasury stock at $20 per share B Cash 52,000 Treasury stock PIC − Treasury stock Sold 2,000 shares of treasury stock at $26 per share 40,000 12,000 Prepare the equity section after the treasury stock transactions. Stockholders’ equity Common stock, $0.10 par value, 1,000,000 shares authorized, 200,000 shares issued, 196,000 shares outstanding Paid-in capital in excess of par Total paid-in capital Retained earnings Treasury stock Paid-in capital from Treasury stock transactions Total stockholders equity What did you learn? Chapter 9 – Page 4 of 12 20,000 1,580,000 1,600,000 3,000,000 (80,000) 12,000 4,532,000 Question 5 Robin corporation had the following equity section. Stockholders’ equity Preferred stock, $25 par value, 8%, 100,000 shares authorized, 40,000 shares issued Paid-in capital in excess of par - preferred Common stock, $0.05 par value, 500,000 shares authorized, 300,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity Record the following journal entries. Account names A Retained earnings (40,000 x $25 x 0.08) Dividends payable Declared annual dividend on preferred stock B C 1,000,000 600,000 15,000 2,400,000 4,015,000 8,000,000 12,015,000 Debit Credit 80,000 80,000 Retained earnings (300,000 x $1.25) 375,000 Dividends payable Declared $1.25 dividend per share on common stock 375,000 Dividends payable Cash Paid all dividends 455,000 455,000 What did you learn? Chapter 9 – Page 5 of 12 Question 6 Nightingale corporation had the following equity section Stockholders’ equity December 31, 2011 Preferred stock, $75 par value, 6%, 20,000 shares authorized, 6,000 shares issued Paid-in capital in excess of par - preferred Common stock, $0.001 par value, 500,000 shares authorized, 400,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity 450,000 120,000 400 750,000 1,320,400 5,600,000 6,920,400 During 2012 Nightingale paid $250,000 in dividends. Calculate the dividends per share for preferred stock and common stock in 2012. Total dividends paid Preferred dividend 2012 (6,000 shares x $75 x 6%) Remainder for common stock Preferred dividend per share ($27,000 / 6,000) Common dividend per share ($223,000 / 400,000) 250,000 (27,000) 223,000 4.50 0.5575 During 2013 Nightingale paid no cash dividends. During 2014 Nightingale paid $500,000 in dividends. Calculate the dividends per share for preferred stock and common stock in 2014. Total dividends paid Preferred dividend 2013, arrears (6,000 shares x $75 x 6%) Preferred dividend 2014 (6,000 shares x $75 x 6%) Remainder for common stock Preferred dividend per share ($54,000 / 6,000) Common dividend per share ($346,000 / 400,000) What did you learn? Chapter 9 – Page 6 of 12 400,000 (27,000) (27,000) 346,000 9.00 0.865 Question 7 Lark corporation had the following equity section Stockholders’ equity Common stock, $0.05 par value, 1,000,000 shares authorized, 300,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity 15,000 600,000 615,000 800,000 1,415,000 Record the following journal entries. Account names Debit Credit Retained earnings (300,000 x 10% x $12) 360,000 Common stock (300,000 x 10% x $0.05) 1,500 PIC x/par 358,500 Issued 10% stock dividend, stock price $12 per share Prepare the equity section after the stock dividend. Stockholders’ equity Common stock, $0.05 par value, 1,000,000 shares authorized, 330,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity What did you learn? Chapter 9 – Page 7 of 12 16,500 958,500 975,000 440,000 1,415,000 Question 8 Sparrow authorized 200,000 shares with a par value of $2 per share. The beginning balances are listed in the table. Record each transaction in the table. Calculate totals after each transaction. A. Issued 500 shares of stock at $6 per share. B. Declared and paid a cash dividend of $1 per share. C. Declared and issued a 20% stock dividend. Market price per share, $10. D. Purchased 1,000 shares of treasury stock at $12 per share. E. Sold 200 shares of treasury stock at $15 per share F. Declared and paid a cash dividend of $2 per share G. Declared and issued a 15% stock dividend. Market price per share, $17. A Issued 10,000 500 10,500 Shares Treas. 0 Out. 10,000 500 10,500 Dollars in stockholders’ equity section C/S x/Par Treas. PIC Trs. 20,000 50,000 0 0 1,000 2,000 21,000 52,000 B C 10,500 2,100 12,600 D 12,600 E 12,600 (1000) (1,000) 200 (800) 10,500 2,100 12,600 (1,000) 11,600 200 11,800 21,000 4,200 25,200 25,200 68,800 11,800 1,770 13,570 25,200 3,540 28,740 68,800 26,550 95,350 25,200 52,000 16,800 68,800 68,800 (12,000) (12,000) 2,400 (9,600) 600 600 G (800) (9,600) 600 (800) (9,600) 600 Chapter 9 – Page 8 of 12 80,000 (10,500) 69,500 (21,000) 48,500 48,500 F 12,600 1,770 14,370 R/E 80,000 48,500 (23,600) 24,900 30,090 54,990 Question 9 Kingfisher corporation had the following equity section. Stockholders’ equity Common stock, $0.10 par value, 2,000,000 shares authorized, 500,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity 50,000 900,000 950,000 600,000 1,550,000 Kingfisher split declared a 4 for 1 stock split during the following year. Prepare the stockholders’ equity section after the stock split. Stockholders’ equity Common stock, $0.025 par value, 8,000,000 shares authorized, 2,000,000 shares issued Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders equity What did you learn? Chapter 5 – Page 9 of 12 50,000 900,000 950,000 600,000 1,550,000 Question 10 Use the Intel annual report to calculate the following amounts. Book value per share 5.39 Ending stockholders' equity 35,468 Ending shares outstanding* 6,575 *Use shares outstanding in equity section of balance sheet Shares outstanding = Shares issued − shares in treasury Return on total assets 7% Net income Interest expense Beginning total assets Ending total assets 3,117 84 44,395 44,224 Return on common equity 9% Net income Beginning common equity Ending common equity 3,117 35,830 35,468 What did you learn? Chapter 5 – Page 10 of 12 Question 11 Record each transaction as a journal entry and show how the transaction effects the balance sheet equation and the statement of cash flows. General journal Balance sheet Cash flows Account names Debit Credit A L SE Op Inv Fin A Cash 600 Common stock 100 Paid-in-capital in excess of par 500 Issued 100 shares of common stock at $6 per share, par value $1 per share B Treasury stock 50 Cash 50 Purchased 10 shares of treasury stock at $5 per share C Cash 48 Treasury stock 30 PIC − Treasury stock 18 Sold 6 shares of treasury stock at $8 share D Retained earnings 900 Dividends payable 900 Declared $900 in cash dividends E Dividends payable 900 Cash 900 Paid dividends declared in previous transactions F Retained earnings 500 Common stock 50 PIC x/par 450 Issued a small stock dividend, 50 shares, market price $10 per share, par value $1 per share What did you learn? Chapter 5 – Page 11 of 12 Question 12 Use the annual report PDF file on my web site. Adobe Common stock par value Common stock shares authorized Common stock shares issued Common stock shares in treasury Common stock shares outstanding Total par value of common stock issued Total additional paid-in capital, common Total paid-in capital = 736,849 Average issue price of all common stock = 3.90 Number of shares in the treasury at year-end Cost of shares in the treasury at year-end Average cost of shares in treasury at year-end = 25.19 Cash paid to purchase treasury stock during year Cash received from sale of treasury stock during year Cash dividends declared and paid during year Number of treasury shares purchased in current year Number of treasury shares re-issued in current year = 6,550 Cost of treasury shares re-issued in current year = 64,424 Additional paid-in capital from re-issuing treas. stock = 92,633 Average re-issue price of treasury in current year = 23.98 Question 13 Calculate all ratios for Adobe using the Excel spreadsheet you created for chapter 13. Use stock price of $16 per share. Print one copy of the spreadsheet with numbers. Submit your work in the following order: Memo, spreadsheets, work papers. Answer the business memo question. Chapter 5 – Page 12 of 12 ...
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This note was uploaded on 10/24/2010 for the course ACCOUNTING 31609 taught by Professor R.ambrose during the Fall '09 term at San Mateo Colleges.

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