Week 4
Assignment in WileyPLUS-2
Do It! Review
11-1 E11-5 E11-7 BYP11-1 BYP11-2 P11-5A P11-8A
Do It! Review
11-1
Indicate
whether each of the following statements is true or false.
E11-5 Garcia
Corporation recently hired a new accountant with extensive experience in
accounting for partnerships. Because of the pressure of the new job, the
accountant was unable to review what he had learned earlier about corporation
accounting. During the first month, he made the following entries for the
corporation’s capital stock.
May 2 Cash 103,220
Capital Stock 103,220
(Issued 7,940 shares
of $11 par value common stock at $13 per share)
10 Cash 621,160
Capital Stock 621,160
(Issued 11,720 shares
of $17 par value preferred stock at $53 per share)
15 Capital Stock 8,400
Cash 8,400
(Purchased 840 shares
of common stock for the treasury at $10 per share)
On the basis
of the explanation for each entry, prepare the entries that should have been
made for the capital stock transactions. (Record entries
in the order displayed in the problem statement. Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
E11-7 On
October 31, the stockholders’ equity section of Pele Company’s balance sheet
consists of common stock $548,400 and retained earnings $443,400.
Pele is
considering the following two courses of action:
(1) Declaring
a 6% stock dividend on the 91,400 $6 par value shares
outstanding
(2) Effecting
a 2-for-1 stock split that will reduce par value to $3 per share.
The current
market price is $15 per share.
Prepare a
tabular summary of the effects of the alternative actions on the company’s
stockholders’ equity and outstanding shares.
Broadening
Your Perspective 11-1
The
stockholders’ equity section of Tootsie Roll
Industries’ balance sheet is shown in the Consolidated
Statement of Financial Position. (Note that Tootsie Roll has two classes
of common stock. To answer the following questions, add the two classes of
stock together.)
Broadening
Your Perspective 11-2
The financial
statements of The Hershey
Company and Tootsie Roll are
presented below.
P11-5A Pringle
Corporation has been authorized to issue 23,300 shares of
$100 par value, 7%, noncumulative preferred stock
and 1,191,200 shares of no-par common stock.
The
corporation assigned a $5 stated value to the common stock. At December
31, 2014, the ledger contained the following balances pertaining to
stockholders’ equity.
Preferred Stock $156,300
Paid-in Capital in Excess of Par Value—Preferred Stock 22,990
Common Stock 1,950,000
Paid-in Capital in Excess of Stated Value—Common Stock 1,680,000
Treasury Stock— (3,720 common shares) 33,480
Retained Earnings 82,100
The preferred
stock was issued for $179,290 cash. All common stock issued was for cash.
In November 3,720 shares of common stock were purchased for the
treasury at a per share cost of $9. No dividends were declared in 2014.
Prepare the
journal entries for the following. (Credit account
titles are automatically indented when amount is entered. Do not indent
manually.)
(1) Issuance
of preferred stock for cash.
(2) Issuance
of common stock for cash.
(3) Purchase
of common treasury stock for cash.
P11-8A On
January 1, 2014, Everett Corporation had these stockholders’ equity accounts.
During the
year, the following transactions occurred.
Jan. 15
Declared a $0.60 cash dividend per share to stockholders of record on
January 31, payable February 15.
Feb. 15
Paid the dividend declared in January.
Apr. 15
Declared a 10% stock dividend to stockholders of record on April 30,
distributable May 15. On April 15, the market price of the stock was
$16 per share.
May 15
Issued the shares for the stock dividend.
Dec. 1
Declared a $0.60 per share cash dividend to stockholders of record on
December 15, payable January 10, 2015.
Dec. 31
Determined that net income for the year was $392,300.
Journalize
the transactions. (Record entries in the order displayed in the
problem statement. Credit account titles are automatically indented when amount
is entered. Do not indent manually.)
TUTORIAL PREVIEW
Prepare
a tabular summary of the effects of the alternative actions on the company’s
stockholders’ equity and outstanding shares.
|
Before Action
|
After Stock
Dividend
|
After Stock
Split
|
|
|
Stockholders'
equity Paid-in capital
|
|||
|
Common
Stock
|
548,400
|
581,304
|
548,400
|
|
In
excess of par value
|
0
|
49,356
|
0
|
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