126. Northwest Clothing Supply has the following transactions during the year related to
stockholders’ equity:
Record each of these transactions.
127. Diane’s Designs has two classes of stock authorized: 8%, $10 par preferred and $1 par
value common. The following transactions affect stockholders’ equity during 2012, its first
year of operations:
Record each of these transactions.
128. Court Casuals has 100,000 shares of common stock outstanding as of the beginning of
2012 and has the following transactions affecting stockholders’ equity in 2012.
Record each of these transactions.
129. Tropical Rainwear issues 1,000 shares of its $20 par value preferred stock for cash at $22
per share. Record the issuance of the preferred shares.
130. Explain why preferred stock often is said to have a mixture of attributes somewhere
between common stock and bonds.
131. Oregon Outfitters issues 1,000 shares of $1 par value common stock at $20 per share.
Later in the year, the company decides to repurchase 200 shares at a cost of $22 per share. (1)
Record the original issue of the 1,000 shares, (2) Record the repurchase of 200 shares, and (3)
Record the entry if Oregon Outfitters reissues the 200 shares of treasury stock at $25 per
share.
132. Desert Apparel has 5,000 shares of common stock outstanding. On April 1, the company
declares a $2 per share dividend to stockholders of record on April 15. The dividend is paid
on April 30. Record all necessary entries on the appropriate dates for cash dividends.
133. On May 15 Canadian Falcon declares a quarterly cash dividend of $0.15 per share
payable on June 10 to all stockholders of record on May 31. Record Canadian Falcon’s
declaration and payment of cash dividends for its 200,000 shares of common stock.
134. Contrast the effects of a cash dividend and a stock dividend on total assets, total
liabilities, and total stockholders’ equity.
135. On March 31, the board of directors of Shoeboxes, Inc. declares a 100% stock dividend
on its 100,000, $0.01 par, common shares. The market price of Shoeboxes common stock is
$30 on March 31. Record the stock dividend.
136. Indicate whether each of the following transactions increases (+), decreases (-), or has no
effect (NE) on total assets, total liabilities, and total stockholders’ equity.
137. Indicate whether each of the following transactions increases (+), decreases (-), or has no
effect (NE) on total assets, total liabilities, and total stockholders’ equity.
138. Prom Night Formal Wear has the following stockholders’ equity accounts at December
31, 2012: Common Stock, $1 par value, 2,000,000 shares; Additional Paid-in Capital, $22
million; Retained Earnings, $15 million; and Treasury Stock, 50,000 shares, $1.25 million.
Prepare the stockholders’ equity section of the balance sheet.
139. Donnie Hilfiger has the following balances in its stockholders’ equity accounts on
December 31, 2012: Treasury Stock, $375,000; Common Stock, $350,000; Preferred Stock,
$1,200,000; Retained Earnings, $1,675,000; and Additional Paid-in Capital, $3,150,000.
Prepare the stockholders’ equity section of the balance sheet for Donnie Hilfiger as of
December 31, 2012.
140. Court Casuals has the following beginning balances in its stockholders’ equity accounts
on January 1, 2012: Common Stock, $100,000; Additional Paid-in Capital, $4,100,000; and
Retained Earnings, $3,000,000. Net income for the year ended December 31, 2012, is
$800,000. Court Casuals has the following transactions affecting stockholders’ equity in 2012:
141. The financial statements of Heatwave Athletic Wear include the following selected data
($ in millions): Sales, $22,502; Net income $875; Beginning stockholders’ equity $3,567;
Ending stockholders’ equity, $4,102. Calculate the return on equity.
142. The financial statements of Trail Apparel include the following selected data (in
millions):
1. Calculate the return on equity for 2013.
2. Calculate the return on the market value of equity for 2013.
3. Calculate the price-earnings ratio for 2013.
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