Please assist with the attached questions and explain the steps for better comprehension.
1. On February 1, 2003, Mario Andretti Corporation issued 2,000 shares of its $5 par value common stock for land worth $31,000. Prepare the February 1, 2003, journal entry.
2. Minnesota Fats Corporation has outstanding 10,000 shares of $100 par value, 8% preferred stock and 60,000 shares of $10 par value common stock. The preferred stock was issued in January 2003, and no dividends were declared in 2003 or 2004. In 2005, Minnesota Fats declares a cash dividend of $300,000. How will the dividend be shared by common and preferred if the preferred is (a) noncumulative and (b) cumulative?
3. Malik Sealy Corporation issued 2,000 shares of $10 par value common stock upon conversion of 1,000 shares of $50 par value preferred stock. The preferred stock was originally issued at $55 per share. The common stock is trading at $26 per share at the time of conversion. Record the conversion of the preferred stock
4. Haley Corporation had 2005 net income of $1,200,000. During 2005, Haley paid a dividend of $2 per share on 100,000 shares of preferred stock. During 2005, Haley had outstanding 250,000 shares of common stock. Compute Haley's 2005 earnings per share.
5. Moonwalker Company purchased, as a held-to-maturity investment, $50,000 of the 9%, 5-year bonds of Prime Time Corporation for $46,304, which provides an 11% return.
Prepare Moonwalker's journal entries for:
a. the purchase of the investment, and
b. the receipt of annual interest and discount amortization. Assume effective interest amortization is used.
6. Penn Corporation purchased for $300,000 a 25% interest in Teller, Inc. This investment enables Penn to exert significant influence over Teller. During the year Teller earned net income of $180,000 and paid dividends of $60,000.
Prepare Penn's journal entries related to this investment.
7. In 2004, Speedy Gonzalez Corporation had pretax financial income of $168,000 and taxable income of $110,000. The difference is due to the use of different depreciation methods for tax and accounting purposes. The effective tax rate is 40%. Compute the amount to be reported as income taxes payable at December 31, 2004.
8. Steven Seagal Corporation had income before income taxes of $175,000 in 2004. Seagal's current income tax expense is $40,000, and deferred income tax expense is $30,000. Prepare Seagal's 2004 income statement, beginning with income before income taxes.
9. For Becker Corporation, year-end plan assets were $2,000,000. At the beginning of the year, plan assets were $1,680,000. During the year, contributions to the pension fund were $120,000, and benefits paid were $200,000.
Compute Becker's actual return on plan assets.
10. For 2001, Campbell Soup Company had pension income of $12 million and contributed $122 million to the pension fund. Prepare Campbell Soup Company's journal entry to record pension income and funding.
11. Larry Beaty Corporation decided at the beginning of 2005 to change from double-declining balance depreciation to straight-line depreciation for financial reporting. The company will continue to use MACRS for tax purposes. For years prior to 2005, depreciation expense under the two methods was as follows: double-declining balance $128,000, and straight-line $80,000. The tax rate is 35%. Prepare Beaty's 2005 journal entry to record the change in accounting principle.
12. Robert Boey, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2005. The increase in the prior year's income before taxes is $1,000,000. The tax rate is 40%. Prepare Boey's 2005 journal entry to record the change in accounting principle.© BrainMass Inc. brainmass.com December 20, 2018, 1:57 am ad1c9bdddf
Debit: Land $31,000
Credit: Common Stock $10,000 (2,000 shares * $5 per share)
Credit: Paid-in Capital in Excess of Par $21,000
(a) Noncumulative: Preferred stock will only get the dividend for 2005. Therefore,
Preferred stock dividend = 10,000 shares * ($100 par) 8 % = $80,000
Common stock dividend = $300,000 - $80,000 = $220,000
(b) Cumulative: Preferred stock will get dividend for three years: 2003, 2004, 2005
Preferred stock dividend = 10,000 shares * ($100 par) 8 % * three years = $240,000
Common stock dividend = $300,000 - $240,000 = ...
Common and preferred stock, EPS, investment, income tax and pension is examined for Minnesota Fats Corporation.