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    Common Stock Transactions

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    During its first year of operations Klump Corporation had the following transactions pertaining to its common stock.

    Jan 10 Issued 70,000 shares for cash at $5 per share
    July 1 Issued 40,000 shares for cash at $8 per share

    (a) Journalize the transactions assuming that the common stock has a par value of $5 per share
    (b) Journalize the transactions assuming that the common stock has a no-par with a stated value of $1 per share

    Garza Co. had the following transactions during the current period.

    Mar 2 - Issued 5,000 shares of $1 par value common stock to attorneys in payment of a bill for
    $30,000 for services provided in helping the company to incorporate.
    June 12 - Issued 60,000 shares of $1 par value common stock for cash of $375,000
    July 11 - Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share
    Nov 28 - Purchased 2,000 shares of treasury stock for $80,000

    Journalize the above transactions.

    Agler and Carl Firm has encounter the following situations in auditing different clients.

    1) Desi Corporation is a closely held corporation whose stock is not publicly traded. On
    December 5, the corporation acquired land by issuing 5,000 shares of its $20 par value common stock. The owners' asking price for the land was $120,000 and the fair market value of the land was $110,000.

    2) Lucille Corporation is a publicly held corporation whose common stock is traded on the
    Securities markets. One June 1, it acquired land by issuing 20,000 shares of its $10 par value stock. At the time of the exchange the land was advertised for sale at $250,000. The stock was selling at $11 per share.

    Prepare the journal entries for each of the above situations

    On January 1, 2005 the stockholders' equity section of Rowen Corporation shows:
    Common Stock ($5 par value) $1,500,000; paid-in capital in excess of par value $1,000,000 and retained earnings $1,200,000. During the year the following treasury stock transactions occurred:

    Mar 1- Purchased 50,000 shares for cash at $16 per share
    July 1 - Sold 10,000 treasury shares for cash at $ 17 per share
    Sept 1 - Sold 8,000 treasury shares for cash at $15 per share.

    a) Journalize the treasury stock transactions
    b) Restate the entry for Sept 1, assuming the treasury shares were sold at $13 per share.

    Flores Corporation : Entries made during the first month by the new accountant for the corporation's capital stock.

    May 2 Cash 120,000
    Capital stock 120,000
    (Issued 10,000 shares of $10 par value
    common stock at $12 per share)

    10 Cash 600,000
    Capital stock 600,000
    (Issued 10,000 shares of $50 par value
    preferred stock at $60 per share)

    15 Capital Stock 14,000
    Cash 14,000
    ( Purchased 1,000 shares of common stock
    for the treasury at $14 per share)

    31 Cash 8,000
    Capital Stock 5,000
    Gain on Sale of Stock 3,000
    (Sold 500 shares of treasury stock at $16
    per share)

    On the basis of the explanation for each entry, prepare the entry that should have been made for the capital stock transaction.

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    https://brainmass.com/business/finance/common-stock-transactions-112985

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    Solution Preview

    During its first year of operations Klump Corporation had the following transactions pertaining to its common stock.

    Jan 10 Issued 70,000 shares for cash at $5 per share
    July 1 Issued 40,000 shares for cash at $8 per share

    (a) Journalize the transactions assuming that the common stock has a par value of $5 per share

    Jan. 10 Cash (70,000 X $5) 350,000
    Common Stock 350,000

    July 1 Cash (40,000 X $8) 320,000
    Common Stock (40,000 X $5) 200,000
    Paid-in Capital in Excess of
    Par Value   (40,000 X $3) 120,000 

    The price in excess of par will be recorded as paid in capital in excess of par

    (b) Journalize the transactions assuming that the common stock has a no-par with a stated value of $1 per share

    Jan. 10 Cash (70,000 X $5) 350,000
    Common Stock (70,000 X $1) 70,000 
    Paid-in Capital in Excess of
    Stated Value   (70,000 X $4) 280,000

    July 1 Cash (40,000 X $8) 320,000
    Common Stock (40,000 X $1) 40,000 
    Paid-in Capital in Excess of
    Stated Value   (40,000 X $7) 280,000

    The price is excess of stated value of $1 will be recorded separately

    Garza Co. had the following transactions during the current period.

    Mar 2 - Issued 5,000 shares of $1 par value common stock to attorneys in payment of a bill for
    $30,000 for services provided in helping the company to incorporate.
    June 12 - Issued 60,000 shares of $1 par value common stock for cash of $375,000
    July 11 - Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share
    Nov 28 - Purchased 2,000 shares of treasury stock for $80,000

    Journalize the above transactions.

    Mar. 2  Organization Expense 30,000 
    Common Stock (5,000 X $1) 5,000  
    Paid-in Capital in Excess of Par
    Value?Common   Stock 25,000 

    June 12 Cash 375,000
    Common Stock (60,000 X ...

    Solution Summary

    The solution explains the journal entries for various stock transactions.

    $2.19