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Valenti Corporation, Trendy Corporation, Bailey Corporation

Problem 1
Valenti Corporation had 5,000 shares of $100 par value, 9 percent cumulative preferred stock and 30,000 shares of $10 par value common stock outstanding during each of its first four years of operation. The following amounts of cash dividends were paid during the years indicated: 20x1, $0; 20x2, $80,000; 20x3, $220,000; 20x4, $270,000. Determine the cash dividends per share paid to the preferred and common stockholders during each of the four years

Problem 2
Trendy Corporation is authorized to issue 100,000 shares of $5 stated value common stock and 2,000 shares of $100 par value, 8 percent preferred stock. Prepare journal entries without explanation to record the following transactions:

Apr. l5 Issued 1,000 shares of common stock to an attorney for a bill of $9,000
in connection with the organization of the corporation.
25 Issued 1,000 shares of preferred stock for cash of $115 per share.
27 Issued 8,000 shares of common stock in exchange for land for a plant site
valued at $50,000.
May 1 Issued l5,000 shares of common stock for $90,000 in cash.

Problem 3
Prepare journal entries without explanations to record the following transactions involving Bailey Corporation's $5 par value common stock:

Apr. 1 Purchased 500 shares of its own common stock for $12, the current market
price. This is the first transaction involving its own stock engaged in by the
company.
May 1 Sold 100 of the share purchased on April 1 for $15.
June 1 Retired 100 of the shares purchased on April 1. The original issue price was $8.
July 1 Sold 200 of the shares purchased on April 1 for $10.

Solution Preview

Problem 1

Valenti Corporation had 5,000 shares of $100 par value, 9 percent cumulative preferred stock and 30,000 shares of $10 par value common stock outstanding during each of its first four years of operation. The following amounts of cash dividends were paid during the years indicated: 20x1, $0; 20x2, $80,000; 20x3, $220,000; 20x4, $270,000. Determine the cash dividends per share paid to the preferred and common stockholders during each of the four years

5,000 shares of $100 par value, 9 percent cumulative preferred stock
30,000 shares of $10 par value common stock

Cash dividend Dividend for preferred stock Dividend for common stock
20x1 0 0 0
20x2 80,000 80,000 (45,000 + 35,000) 0
20x3 220,000 55,000 (45,000 + 10,000) 165,000 (220,000 - ...

Solution Summary

This solution is comprised of a detailed explanation to determine the cash dividends per share paid to the preferred and common stockholders during each of the four years, prepare journal entries without explanation to record the following transactions, and prepare journal entries without explanations to record the following transactions involving Bailey Corporation's $5 par value common stock.

$2.19