134.
Prepare journal entries for stockholders’ equity transactions
A partial list of the ledger accounts of Skyway Corporation is shown below, followed by a
list of transactions. Indicate the accounts that would be debited and credited in recording
each transaction.
135.
Prepare journal entries for stockholders’ equity transactions
A partial list of the ledger accounts of Hellman Company is shown below, followed by a list
of transactions. Indicate the accounts that would be debited and credited in recording
each transaction.
136.
Determining book value per share
Shown below is information relating to the stockholders’ equity of Churchill, Inc.:
From the above information, compute the following:
(a) Number of shares of preferred stock issued and outstanding
(b) Average issue price per share of common stock
(c) Total paid-in capital
(d) Total stockholders’ equity
(e) Book value per share of common stock
s
137.
Stock values
Presented below is an excerpt from the stock listings of a recent issue of the Wall Street
Journal.
Answer the following questions based on the information about the Russell Corporation
given above:
(a) How many shares of Russell Corporation stock were sold on this day?
(b) If you had purchased 10 shares of Russell Corporation stock at the lowest price of the
day, what would be the total price that you would have paid for the stock?
(c) What was the closing price of Russell Corporation Stock on the previous day?
(d) If the board of directors of Russell Corporation increased the amount of the annual
dividends to $1.00 per share, what would be the amount of the yield percentage on the
stock?
11–88
138.
Prepare the stockholders’ equity section from transaction data
Shown below is the stockholders’ equity section of Jones’ balance sheet at December 31,
2015.
In 2015, the following events occurred:
Jones issued 2,000 shares of $5 par value common stock in exchange for legal services
relating to the formation of the corporation; value of these services was set at $19,500.
Jones issued 8,000 of its 10,000 authorized shares of $8 cumulative preferred stock, $100
par value, for $108 per share.
The board of directors declared and paid dividends of $8 per share to preferred
stockholders and 50 cents per share to common stockholders.
The company’s net income for 2015 is $450,000.
Instructions: Complete in good form the stockholders’ equity section of a balance sheet
prepared for Jones at December 31, 2015.
11–90
139.
Prepare the stockholders’ equity section from transaction data.
Shown below is the stockholders’ equity section of Farrell Corporation’s balance sheet at
December 31, 2014:
In 2015, the following events occurred:
Farrell Corporation issued 1,000 shares of $3 par common stock in exchange for land.
Although several real estate appraisers disagree on the value of the land, Farrell’s stock is
currently selling on a stock exchange for $32 per share.
Farrell Corporation issued 3,000 shares of 5% cumulative preferred stock, $100 par value,
for $108 per share.
The board of directors declared a dividend of $1 per share on the common stock.
Farrell’s net income for 2015 is $375,000.
Instructions: Complete in good form the stockholders’ equity section of a balance sheet
prepared for Farrell Corporation at December 31, 2015:
140.
Financial reporting of and retained earnings
The 2015 annual report of Kirtland Products disclosed net income of approximately $87
million for the fiscal year ending March 31, 2015, and retained earnings of approximately
$485 million as of March 31, 2015.
(a) Which financial statement shows computation of net income?
(b) Which financial statement includes the retained earnings figure of $485 million?
(c) Explain why Kirtland reports $87 million as net income, but a much larger amount,
$485 million, as retained earnings.