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Chapter 11 Solutions - PRACTICE EXERCISES PE 111A Year 1...

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PRACTICE EXERCISES PE 11–1A Year 1 Year 2 Year 3 Amount distributed ............................... $15,000 $5,000 $62,000 Preferred dividend (5,000 shares) ........ 8,000 5,000 11,000 * Common dividend (10,000 shares) ...... $ 7,000 $ 0 $ 51,000 *(3,000 + 8,000) Dividends per share: Preferred stock .............................. $1.60 $1.00 $2.20 Common stock ............................... $0.70 None $5.10 PE 11–1B Year 1 Year 2 Year 3 Amount distributed ............................... $30,000 $6,000 $80,000 Preferred dividend (10,000 shares) ...... 10,000 6,000 14,000 * Common dividend (25,000 shares) ...... $ 20,000 $ 0 $66,000 *($4,000 + $10,000) Dividends per share: Preferred stock .............................. $1.00 $0.60 $1.40 Common stock ............................... $0.80 None $2.64 PE 11–2A July 3 Cash ....................................................................... 1,125,000 Common Stock ................................................ 1,125,000 (450,000 shares × $2.50). Sept. 1 Cash ....................................................................... 250,000 Preferred Stock ............................................... 250,000 (10,000 shares × $25). Oct. 30 Cash ....................................................................... 225,000 Preferred Stock ............................................... 187,500 Paid-In Capital in Excess of Par .................... 37,500* *(7,500 shares × $5) 1
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PE 11–2B Feb. 13 Cash ....................................................................... 10,500,000 Common Stock ................................................ 9,375,000 Paid-In Capital in Excess of Stated Value .... 1,125,000* *(75,000 shares × $15) Sept. 9 Cash ....................................................................... 900,000 Preferred Stock ............................................... 900,000 (15,000 shares × $60). Nov. 23 Cash ....................................................................... 560,000 Preferred Stock ............................................... 480,000 Paid-In Capital in Excess of Par .................... 80,000* *(8,000 shares × $10) PE 11–3A Oct. 6 Cash Dividends ..................................................... 112,750 Cash Dividends Payable ................................ 112,750 Nov. 5 No entry required. Dec. 5 Cash Dividends Payable ...................................... 112,750 Cash .................................................................. 112,750 PE 11–3B July 1 Cash Dividends ..................................................... 61,500 Cash Dividends Payable ................................ 61,500 Aug. 1 No entry required. Sept. 30 Cash Dividends Payable ...................................... 61,500 Cash .................................................................. 61,500 PE 11–4A May 10 Stock Dividends (100,000 × 2% × $48) ............... 96,000 Stock Dividends Distributable (2,000 × $40) 80,000 Paid-In Capital in Excess of Par— Common Stock ($96,000 – $80,000) .............. 16,000 June 9 No entry required. Aug. 1 Stock Dividends Distributable ............................ 80,000 Common Stock ................................................ 80,000 2
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PE 11–4B Feb. 13 Stock Dividends (600,000 × 4% × $90) ............... 2,160,000 Stock Dividends Distributable (24,000 × $75) 1,800,000 Paid-In Capital in Excess of Par— Common Stock ($2,160,000 – $1,800,000) .... 360,000 Mar. 14 No entry required. Apr. 30 Stock Dividends Distributable ............................ 1,800,000 Common Stock ................................................ 1,800,000 PE 11–5A Oct. 3 Treasury Stock (10,000 × $9) ............................... 90,000 Cash .................................................................. 90,000 Nov. 15 Cash (6,800 × $12) ................................................ 81,600 Treasury Stock (6,800 × $9) ............................ 61,200 Paid-In Capital from Sale of Treasury Stock [6,800 × ($12 – $9)] ............... 20,400 Dec. 22 Cash (3,200 × $7) .................................................. 22,400 Paid-In Capital from Sale of Treasury Stock [3,200 × ($9 – $7)] ...................... 6,400 Treasury Stock (3,200 × $9) ............................ 28,800 PE 11–5B Feb. 1 Treasury Stock (7,500 × $30) ............................... 225,000 Cash .................................................................. 225,000 Mar. 15 Cash (4,500 × $34) ................................................ 153,000 Treasury Stock (4,500 × $30) ......................... 135,000 Paid-In Capital from Sale of Treasury Stock [4,500 × ($34 – $30)] ............. 18,000 June 2 Cash (3,000 × $28) ................................................ 84,000 Paid-In Capital from Sale of Treasury Stock [3,000 × ($30 – $28)] .................. 6,000 Treasury Stock (3,000 × $30) ......................... 90,000 3
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PE 11–6A Stockholders’ Equity Paid-in capital: Common stock, $75 par (70,000 shares authorized, 63,000 shares issued) .................. $4,725,000 Excess of issue price over par ............................. 679,000 $5,404,000 From sale of treasury stock .................................. 25,200 Total paid-in capital .......................................... $5,429,200 Retained earnings ....................................................... 2,032,800 Total ......................................................................... $7,462,000 Deduct treasury stock (7,500 shares at cost) ........... 588,000
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