5. The corporate charter authorizes the issuance of 10,000 shares of preferred 10% stock, 100 dollars par and 100,000 shares of 20 dollar par common stock. At the end of the current year, the title and balances of the stock holder's equity accounts are as follows:
COMMON STOCK 1,600,000
DISCOUNT ON COMMON STOCK 80,000
PAID IN CAPITAL FROM SALE OF TREASURY STOCK 5,000
PREFERRED STOCK 500,000
PREMIUM ON PREFERRED STOCK 40,000
RETAINED EARNINGS 405,000
TREASURY COMMON STOCK (5000 SHARES AT COST)
Prepare stock holders equity section of the sheet as the end of the current year.
6. Horwath Co has 10,000 shares of $25.00 par common stock outstanding. Present entries in the general journal form to record the following:
A) Purchased 1000 shares of treasury stock at 30.00 the treasury stock is accounted for by the cost method.
B) Sold 500 shares of treasury stock at 40 dollars.
C) Purchased equipment from CL Latin Co for 175,000.00 paying 25,000 in cash and issuing 5,000 shares of stock for the equipment.
D) Sold 500 shares of treasury stock at 25 dollars.
7. Present the following entries in the general journal form
A) Issued 10,000 shares of common stock with a stated value of 5 dollars in exchange for equipment with a fair market price of 95,000
B) Issued 2000 shares of 50 dollars par preferred stock at 55 dollars for cash
C) Purchased 100 shares of treasury stock at 60 dollars accounting for it by the cost method
D) Received subscriptions on 25,000 shares of common stock at 9 dollars
E) Received 50% of subscriptions price from all subscribers
F) Received final payment from Subscribers and issued stock certificates
8. Selected data from the balance sheets of three corps identified by letter are presented below
A preferred 7 % stock 100 par 500,000
Premium on preferred stock 45,000
Common stock, 50 dollars par 1,000,000
Discount on common stock 75,000
B. preferred 8 % stock 50 par 400,000
Common stock, 25 dollars par 1,250,000
Premium on common stock 100,000
Retained earnings 80,000
Dividends on preferred stock are in arrears for 3 years including dividends passed during the current year. Preferred stock is entitled to par plus unpaid cumulative dividends upon liquidation to the extent of the retained earnings.
C. preferred 6 % stock 25 par 750,000
Discount on preferred stock 50,000
Common stock, 5 dollars par 1,500,000
Retained earnings 80,000
6. Dividends on preferred stock are in arrears for 2 years including the dividends passed during the current year. Preferred stock is plus unpaid cumulative dividends regardless of the availability of the retained earnings.
Present the entries in general journal form to record the following:
January 9th purchased 1000 shares of own common stock at 31 dollars recording the stock at cost. (Prior to the purchase there were 40,000 shares of 20 dollars par common stock outstanding.)
May 18 declared a semiannual dividend of a 1.25 on the 8000 shares of preferred stock and a 0.30cent dividend on the common stock to stock holders of record on May 28th payable June 10th.
June 10th paid the cash dividends
August 23 sold 600 shares of treasury stock at 34 dollars receiving cash
November 12 declared semiannual dividends of 1.25 on the preferred and 30 cents on the common, in addition a 5% common stock dividend declared on the common stock outstanding to be capitalized at the fair market value of the common stock which is estimated at 35 dollars.
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