291 WK 4 INDIVIDUAL ASSIGNMENT – EXERCISES
Complete Exercises E11-15, E12-1, & E12-2.
Complete Problem 11-6A.
E11-15
Before Action
After Stock Dividend
After Stock Split
Stockholders’ equity
Paid-in capital
Common stock
$600,000
$630,000
$600,000
In excess of par value
0
3,000 x ($14-$10)=
12,000
0
Total paid-in capital
600,000
642,000
600,000
Retained earnings
900,000
$900,000-(3,000 x $14)
858,000
900,000
Total stockholders’
equity
1,500,000$
$1,500,000
$1,500,000
Outstanding shares
60,000
63,000
120,000
Book value per share
$25.00
$23.81
$12.50
P11-6A
(a) Prepare the journal entries for the:
(1) Issuance of preferred stock for land.
Land 296,000
Preferred Stock 240,000 (2,400 x $100)
Paid-in Capital in Excess of Par Value—Preferred 56,000
Land 296,000
Preferred Stock 240,000 (2,400 x $100)
Paid-in Capital in Excess of Par Value—Preferred 56,000
(2) Issuance of common stock for cash.
Cash 7,700,000 ($2,000,000 + $5,700,000)
Common Stock2,000,000 (400,000 x $5)
Paid-in Capital in Excess of Stated Value—Common 5,700,000
Cash 7,700,000 ($2,000,000 + $5,700,000)
Common Stock2,000,000 (400,000 x $5)
Paid-in Capital in Excess of Stated Value—Common 5,700,000
(3) Purchase of common treasury stock for cash.
Treasury Stock 33,000 (1,500 x $22)
Cash 33,000
Treasury Stock 33,000 (1,500 x $22)
Cash 33,000
(4) Sale of treasury stock for cash.
Cash 14,000 (500 x $28)
Common Treasury Stock 11,000 (500 x $22)
Paid-in Capital from Treasury Stock 3,000 (500 x $6)
Cash 14,000 (500 x $28)
Common Treasury Stock 11,000 (500 x $22)
Paid-in Capital from Treasury Stock 3,000 (500 x $6)
(b) Prepare the stockholders’ equity section at December 31, 2011.
PRODUCT DESCRIPTION
ACC 291 WEEK 4 INDIVIDUAL ASSIGNMENT – EXERCISES,
E11-15
Before Action After Stock Dividend After Stock Split
Stockholders’ equity
Paid-in capital
Common stock $600,000 $630,000 $600,000
In excess of par value 0 3,000 x ($14-$10)=12,000 0
Stockholders’ equity
Paid-in capital
Common stock $600,000 $630,000 $600,000
In excess of par value 0 3,000 x ($14-$10)=12,000 0
Stockholders’ equity
Paid-in capital
Capital stock
8% Preferred stock, $100 par value
Noncumulative, 40,000 authorized shares
2,400 issued and outstanding shares…………………………………………………………………….$240,000
Common Stock, no par, $5.00
400,000 authorized shares, 399,000 outstanding……………………………………………..……2,000,000
Additional paid-in capital in excess of par value-preferred stock……………$56,000
in excess of par value-common stock……………5,700,000
Treasury stock – common………………………3,000
Total additional paid-in capital………………………………………………………………………….……5,759,000
Total paid-in capital……………………………………………………………………………………………….7,999,000
Retained earnings……………………………………………………………………………………………………….560,000
Total paid-in capital and retained earnings…………………………………………………..………….8,559,000
Less: Treasury stock (1,000 common shares)…………………………….………………………………..(22,000)
Total stockholders’ equity…………………………………………………………………………………….$8,537,000
E12-1
Three reasons why companies purchase investments in debt or stock securities are because they may have excess cash on hand, want to generate earnings from investment income, and invest for strategic reasons.
A corporation might have excess cash that it does not need for operations due to reasons such as seasonal fluctuations in sales and economic cycles.
The typical investment when investing cash for short periods of time is a government issued security.
Stockholders’ equity
A corporation might have excess cash that it does not need for operations due to reasons such as seasonal fluctuations in sales and economic cycles.
The typical investment when investing cash for short periods of time is a government issued security.
Stockholders’ equity
Paid-in capital
Capital stock
8% Preferred stock, $100 par value
Noncumulative, 40,000 authorized shares
2,400 issued and outstanding shares…………………………………………………………………….$240,000
Common Stock, no par, $5.00
400,000 authorized shares, 399,000 outstanding……………………………………………..……2,000,000
Additional paid-in capital in excess of par value-preferred stock……………$56,000
in excess of par value-common stock……………5,700,000
Treasury stock – common………………………3,000
Total additional paid-in capital………………………………………………………………………….……5,759,000
Total paid-in capital……………………………………………………………………………………………….7,999,000
Retained earnings……………………………………………………………………………………………………….560,000
Total paid-in capital and retained earnings…………………………………………………..………….8,559,000
Less: Treasury stock (1,000 common shares)…………………………….………………………………..(22,000)
Total stockholders’ equity…………………………………………………………………………………….$8,537,000
E12-1
Three reasons why companies purchase investments in debt or stock securities are because they may have excess cash on hand, want to generate earnings from investment income, and invest for strategic reasons.
A corporation might have excess cash that it does not need for operations due to reasons such as seasonal fluctuations in sales and economic cycles.
The typical investment when investing cash for short periods of time is a government issued security.
A corporation might have excess cash that it does not need for operations due to reasons such as seasonal fluctuations in sales and economic cycles.
The typical investment when investing cash for short periods of time is a government issued security.
ACC 291 WEEK 4 INDIVIDUAL ASSIGNMENT EXERCISES
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