82
151) The following information comes from the 2018 Annual Report to stockholders of
Composition Inc. (in thousands):
From the Statement of Changes in Shareholders’ Equity:
Capital
in
Excess of
Par
Treasury
Shares
Treasury
Stock
Amount
Retained
Earnings
BALANCES AT December 31, 2016
$ 0
(30,561)
($524,321)
$1,673,382
Net earnings
–
–
–
242,941
Sales of common stock under option
plans
(5,181)
377
10,738
–
Cash dividends declared on common
stock:
$.5375 per share
–
–
–
(68,952)
Compensation under employee
incentive plans
(1,802)
395
9,408
–
Treasury shares exchanged for
Acquisitions
139,209
20,449
318,293
–
Purchase of shares for treasury
–
(6,668)
(122,906)
–
BALANCES AT December 31, 2017
132,226
(16,008)
(308,788)
1,847,371
Net earnings
–
–
–
81,965
Sales of common stock under option
plans
(3,538)
279
7,095
–
Cash dividends declared on common
stock:
$.5475 per share
–
–
–
(72,903)
Compensation under employee
incentive plans
(196)
366
8,271
–
Purchase of shares for treasury
–
(2,933)
(48,678)
–
BALANCES AT December 31, 2018
$128,492
(18,296)
$(342,100)
$1,856,433
From the Statement of Cash Flows:
Cash flows from financing activities:
2018
2017
Dividends paid
72,244
66,932
What was the average cost per share of the treasury stock purchased by Composition during
2017 and 2018, respectively?
84
152) The following information comes from the 2018 Annual Report to stockholders of
Composition Inc. (in thousands):
From the Statement of Changes in Shareholders’ Equity:
Capital
in
Excess of
Par
Treasury
Shares
Treasury
Stock
Amount
Retained
Earnings
BALANCES AT December 31, 2016
$ 0
(30,561)
($524,321)
$1,673,382
Net earnings
–
–
–
242,941
Sales of common stock under option
plans
(5,181)
377
10,738
–
Cash dividends declared on common
stock:
$.5375 per share
–
–
–
(68,952)
Compensation under employee incentive
plans
(1,802)
395
9,408
–
Treasury shares exchanged for
Acquisitions
139,209
20,449
318,293
–
Purchase of shares for treasury
–
(6,668)
(122,906)
–
BALANCES AT December 31, 2017
132,226
(16,008)
(308,788)
1,847,371
Net earnings
–
–
–
81,965
Sales of common stock under option
plans
(3,538)
279
7,095
–
Cash dividends declared on common
stock:
$.5475 per share
–
–
–
(72,903)
Compensation under employee incentive
plans
(196)
366
8,271
–
Purchase of shares for treasury
–
(2,933)
(48,678)
–
BALANCES AT December 31, 2018
$128,492
(18,296)
$(342,100)
$1,856,433
From the Statement of Cash Flows:
Cash flows from financing activities:
2018
2017
Dividends paid
72,244
66,932
How many shares of treasury stock were removed for use during 2017, and for what purpose(s)?
86
153) The following information comes from the 2018 Annual Report to stockholders of
Composition Inc. (in thousands):
From the Statement of Changes in Shareholders’ Equity:
Capital
in
Excess
of
Par
Treasury
Shares
Treasury
Stock
Amount
Retained
Earnings
BALANCES AT December 31, 2016
$ 0
(30,561)
($524,321)
$1,673,382
Net earnings
–
–
–
242,941
Sales of common stock under option
plans
(5,181)
377
10,738
–
Cash dividends declared on common
stock:
$.5375 per share
–
–
–
(68,952)
Compensation under employee
incentive plans
(1,802)
395
9,408
–
Treasury shares exchanged for
Acquisitions
139,209
20,449
318,293
–
Purchase of shares for treasury
–
(6,668)
(122,906)
–
BALANCES AT December 31, 2017
132,226
(16,008)
(308,788)
1,847,371
Net earnings
–
–
–
81,965
Sales of common stock under option
plans
(3,538)
279
7,095
–
Cash dividends declared on common
stock:
$.5475 per share
–
–
–
(72,903)
Compensation under employee
incentive plans
(196)
366
8,271
–
Purchase of shares for treasury
–
(2,933)
(48,678)
–
BALANCES AT December 31, 2018
$128,492
(18,296)
$(342,100)
$1,856,433
From the Statement of Cash Flows:
Cash flows from financing activities:
2018
2017
Dividends paid
72,244
66,932
What was the fair value of the treasury stock exchanged for asset acquisitions for 2017?
88
154) The following information comes from the 2018 Annual Report to stockholders of
Composition Inc. (in thousands):
From the Statement of Changes in Shareholders’ Equity:
Capital
in
Excess of
Par
Treasury
Shares
Treasury
Stock
Amount
Retained
Earnings
BALANCES AT December 31, 2016
$-
(30,561)
($524,321)
$1,673,382
Net earnings
–
–
–
242,941
Sales of common stock under option
plans
(5,181)
377
10,738
–
Cash dividends declared on common
stock:
$.5375 per share
–
–
–
(68,952)
Compensation under employee incentive
plans
(1,802)
395
9,408
–
Treasury shares exchanged for
Acquisitions
139,209
20,449
318,293
–
Purchase of shares for treasury
–
(6,668)
(122,906)
–
BALANCES AT December 31, 2017
132,226
(16,008)
(308,788)
1,847,371
Net earnings
–
–
–
81,965
Sales of common stock under option
plans
(3,538)
279
7,095
–
Cash dividends declared on common
stock:
$.5475 per share
–
–
–
(72,903)
Compensation under employee incentive
plans
(196)
366
8,271
–
Purchase of shares for treasury
–
(2,933)
(48,678)
–
BALANCES AT December 31, 2018
$128,492
(18,296)
$(342,100)
$1,856,433
From the Statement of Cash Flows:
Cash flows from financing activities:
2018
2017
Dividends paid
72,244
66,932
Assuming that Composition had Dividends Payable of $17,450 thousand at December 31, 2016,
compute the balance in that account at December 31, 2018.
12/31/2016 balance
Add: Dividends declared:
In 2017
In 2018
Less: Dividends paid:
In 2017
In 2018
12/31/2018 balance
155) During its first year of operations, Cole’s Electronics Inc. completed the following
transactions relating to shareholders’ equity.
January 5:
Issued 1,000,000 shares of common stock for $25 per share.
February 12:
Issued 20,000 shares of common stock to accountants for
$500,000 of professional services.
The articles of incorporation authorize 5,000,000 shares of common stock with a par of $1 per
share and 1,000,000 preferred shares with a par of $100 per share.
Required:
Record the above transactions in general journal form.
1.)
Cash (1,000,000 × $25)
Common stock (1,000,000 × $1)
Paid-in capital–excess of par
Professional services expense
(20,000 × $25)
Common stock (20,000 × $1)
Paid-in capital–excess of par
156) During its first year of operations, Criswell Inc. completed the following transactions
relating to shareholders’ equity.
January 5:
Issued 300,000 of its common shares for $8 per share and 3,000 preferred
shares at $110.
February 12:
Issued 50,000 shares of common stock in exchange for equipment with a
known cash price of $310,000.
The articles of incorporation authorize 5,000,000 shares with a par of $1 per share of common
and 1,000,000 preferred shares with a par of $100 per share.
Required:
Record the above transactions in general journal form.
1.)
Cash (300,000 × $8)
Common stock (300,000 × $1)
Paid-in capital–excess of par, common
Cash (3,000 × $110)
Preferred stock (3,000 × $100)
Paid-in capital–excess of par, preferred
2.)
Equipment (cash price)
Common stock (50,000 × $1)
Paid-in capital–excess of par
157) During the current year JET Industries issued 5 million of its $1 par common shares to its
underwriters for $25,000,000 less promotional and accounting services of $500,000 to effect the
issue.
Required:
Prepare the journal entry to record the issuance of the shares.
158) The shareholders’ equity of Tru Corporation includes $600,000 of $1 par common stock
and $1,200,000 par of 6% cumulative preferred stock. The board of directors of Tru declared
cash dividends of $150,000 in 2018 after paying $60,000 cash dividends in each of 2017 and
2016.
Required:
What is the amount of dividends common shareholders will receive in 2018?
159) The shareholders’ equity of HS Corporation includes $300,000 of $1 par common stock
and $600,000 par of 6% cumulative preferred stock. The board of directors of HS declared cash
dividends of $70,000 in 2018 after paying $30,000 cash dividends in 2017 and $50,000 in 2016.
Required:
What is the amount of dividends common shareholders will receive in 2018?
160) Cal Cookie Company (CCC) has 100 million shares of $1 par common stock authorized.
The transactions below caused changes in CCC’s outstanding shares.
January 4, 2018:
Repurchased and retired 1 million shares at $8 per share.
June 25, 2018:
Repurchased and retired 2 million shares at $2 per share.
Prior to the transactions, CCC’s shareholders’ equity included the following:
Common stock, 80 million shares at $1 par
$80,000,000
Paid-in capital–excess of par
160,000,000
Retained earnings
120,000,000
Required:
Record entries for the above transactions.
January 4, 2018
Common stock (1 million × $1 par)
Paid-in capital–excess of par (1 million × $2*)
Retained earnings (difference)
Cash (1 million × $8)
June 25, 2018
Common stock (2 million × $1 par)
Paid-in capital–excess of par (2 million × $2)
Cash (2 million × $2)
Paid-in capital–share repurchase (difference)
161) On December 31, 2017, Rebel Corporation’s balance sheet reported the following.
Common stock, $1 par
$1,000,000
Paid-in capital–excess of par
4,000,000
Retained earnings
5,280,000
Treasury stock (20,000 shares at cost)
(625,000)
During 2018, Rebel decided to discontinue accounting for share buybacks as treasury shares.
Instead, the shares will be treated as having been retired.
Required:
Prepare the appropriate journal entry to effect this change.
Common stock (20,000 × $1)
20,000
Paid-in capital–excess of par
Retained earnings (difference)
Treasury stock
625,000
162) In 2018, Poe’s Products completed the treasury stock transactions described below.
January 2:
Reacquired 10 million shares at $16 per share.
February 15:
Sold 3 million shares at $20 per share.
September 20:
Sold 3 million treasury shares at $15 per share.
Poe had issued 50 million shares of its $1 par common stock for $18 several years ago.
Required:
Record the above transactions assuming that Poe’s Products uses the cost method.
Treasury stock (10 × $16)
Cash (10 × $16)
Cash (3 × $20)
Treasury stock (3 × $16)
Paid-in capital–share repurchase
Cash (3 × $15)
Paid-in capital–share repurchase
Treasury stock (3 × $16)
163) In 2018, Southwestern Corporation completed the treasury stock transactions listed below.
February 2:
Reacquired 70,000 shares at $12.
March 17:
Sold 20,000 shares at $14.
May 17:
Sold 25,000 shares at $8.
Southwestern had issued 100,000 shares of its $1 par common stock for $10 several months ago.
Required:
Prepare the journal entries to record the above transactions, using the cost method.
Treasury stock (70,000 × $12)
Cash (70,000 × $12)
Cash (20,000 × $14)
Treasury stock (20,000 × $12)
Paid-in capital–share repurchase
Cash (25,000 × $8)
Paid-in capital–share repurchase
Retained earnings (to balance)
Treasury stock (25,000 × $12)
164) The December 31, 2018, balance sheet of Springer Company included the following:
Common stock, 20 million shares outstanding at $1 par
$20,000,000
Paid-in capital–excess of par
100,000,000
Retained earnings
115,000,000
Springer completed the following transactions in 2018 relating to treasury stock:
March 17:
Reacquired 5 million shares at $10.
May 17:
Reacquired 3 million shares at $9.
August 10:
Sold 6 million shares at $12.
Required:
Assuming Springer uses the cost method, prepare journal entries to record the foregoing
transactions on a FIFO basis.
Treasury stock (5 × $10)
Cash
Treasury stock (3 × $9)
Cash
Cash (6 × $12)
Treasury stock *
Paid-in capital–share repurchase
*5 × $10 =
1 × $9 =
165) The December 31, 2018, balance sheet of MBI Company included the following:
Common stock, 20 million shares outstanding at $1 par
$20,000,000
Paid-in capital–excess of par
100,000,000
Retained earnings
115,000,000
MBI completed the following transactions in 2018 relating to treasury stock:
March 17:
Reacquired 2 million shares at $10.
May 17:
Reacquired 2 million shares at $9.
August 10:
Issued 3 million shares at $12.
Required:
Prepare journal entries to record the foregoing transactions on a weighted average basis.
Treasury stock (2 × $10)
Cash
Treasury stock (2 × $9)
Cash
Cash (3 × $12)
Treasury stock *
Paid-in capital – share repurchase
*2 × $10 =
$20,000,000
2 × $9 =
$38,000,000