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Chapter 12 - Corporations: Organization, Stock Transactions, and Dividends
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Page 71
Cash
144,000
Common Stock
20,000
Paid-In Capital in Excess of Par—Common
Stock
124,000
(b)
Land
130,000
Common Stock
25,000
Paid-In Capital in Excess of Par—Common
Stock
105,000
(c)
Treasury Stock
28,000
Cash
28,000
(d)
Cash
30,400
Treasury Stock
28,000
Paid-In Capital from Sale of Treasury Stock
2,400
POINTS:
1
DIFFICULTY:
Bloom's: Applying
Challenging
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.12-02 - LO: 12-02
FNMN.WAJO.19.12-05 - LO: 12-05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.20 - Accounting for Corporations
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:31 PM
DATE MODIFIED:
10/16/2017 6:21 PM
183. A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of 10%,
$100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends
are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the
schedule.
Preferred
Common
Year
Dividends
Total
Per Share
Total
Per Share
1
$10,000
_________
_________
_________
_________
2
25,000
_________
_________
_________
_________
3
60,000
_________
_________
_________
_________
ANSWER:
Preferred
Common
Year
Dividends
Total
Per
Share
Total
Per
Share
3
60,000
40,000
16.00
$20,000
$0.40
POINTS:
1
190. Macy Company has 10,000 shares of 2% cumulative preferred stock of $50 par and 25,000 shares of $75 par
common stock. The following amounts were distributed as dividends:
Year 1:
$30,000
Year 2:
6,000
Year 3:
80,000
Determine the dividends per share for preferred and common stock for each year.
ANSWER:
Year 1
Year 2
Year 3
Amount distributed
$30,000
$6,000
$80,000
Preferred dividend (10,000 shares)
10,000
6,000
14,000*
Common dividend (25,000 shares)
$20,000
$ 0
$66,000
*($4,000 + $10,000)
Dividends per share:
Preferred stock
$ 1.00
$ 0.60
$ 1.40
Common stock
$ 0.80
None
$ 2.64
POINTS:
1
DIFFICULTY:
Bloom's: Applying
Moderate
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.12-02 - LO: 12-02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.20 - Accounting for Corporations
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:31 PM
DATE MODIFIED:
10/16/2017 6:21 PM
191. Solar Company has 600,000 shares of $75 par common stock outstanding. On February 13, Solar declared a 3%
stock dividend to be issued on April 30 to stockholders of record on March 14. The market price of the stock was $90 per
share on February 13.
Journalize the entries required on February 13, March 14, and April 30.
ANSWER:
Feb.
13
Stock Dividends
(600,000 × 3% × $90)
1,620,000
Stock Dividends Distributable
(18,000 × $75)
1,350,000
Paid-In Capital in Excess of Par—
Common Stock
($1,620,000 – $1,350,000)
270,000
Mar.
14
No entry required.
