35. Use the following information to obtain the ratios requested below. Where necessary, carry answers to
one decimal place.
Dividends per share: $.76
Market price per share: $40
Net income: $64,000
Stockholders’ equity, beginning of year: $500,000
Stockholders’ equity, end of year: $530,000
Earnings per share: $1.75
a. Dividends yield = _____________%
b. Return on equity = _____________%
c. Price/earnings (P/E) ratio = __________ times
36. Mercer Corporation has 200,000 shares of $10 stated value no-par common stock authorized, and
160,000 shares were outstanding during 2009. The following transactions relate to cash dividends of
Mercer Corporation for the year ended December 31, 2009. Prepare entries in journal form without
explanations to record the following transactions:
June
1
Declared a semiannual cash dividend of $0.50 per common share.
15
Compiled the list of individual shareholders eligible for the dividend declared
on June 1.
July
5
Paid the dividend declared on June 1.
Dec.
1
Declared a semiannual cash dividend of $0.50 per common share to be paid on
January 5, 2010.
15
Compiled the list of individual shareholders eligible for the dividend declared
on December 1.
31
Closed the Dividends account at year end.
General Journal
Page 1
Date
Description
Post.
Ref.
Debit
Credit
37. Sylmar Corporation has 30,000 shares of $100 stated value no-par common stock authorized, and
20,000 shares were outstanding during 2009. The following transactions relate to cash dividends of
Sylmar Corporation for the year ended December 31, 2009. Prepare entries in journal form without
explanations to record the following transactions:
June
1
Declared a semi-annual cash dividend of $0.70 per common share.
15
Compiled the list of individual shareholders eligible for the dividend declared on
June 1.
July
5
Paid the dividend declared on June 1.
Dec.
1
Declared a semi-annual cash dividend of $0.70 per common share to be paid on
January 5, 2010.
15
Compiled the list of individual shareholders eligible for the dividend declared on
December 1.
31
Closed the Dividends account at year end.
General Journal
Page 1
Date
Description
Post.
Ref.
Debit
Credit
20,000 $0.70
38. Prepare in proper form the stockholders’ equity section of the balance sheet from the following
selected accounts and balances taken from the adjusted trial balance of Keller Corporation as of
December 31, 20xx.
Partial Adjusted Trial Balance
Account
Debit
Credit
Common Stock—$10 par value, 100,000 shares authorized, 55,000
shares issued and outstanding
550,000
Preferred Stock—$100 par value, 9 percent cumulative, 20,000 shares
authorized, 4,000 shares issued and outstanding
400,000
Additional Paid-in Capital, Preferred
15,000
Additional Paid-in Capital, Common
400,000
Retained Earnings
90,000
Contributed capital
Common stock—$10 par value, 100,000 shares
Dividends Payable
Dividends
39. Prepare in proper form the stockholders’ equity section of the balance sheet from the following
selected accounts and balances taken from the adjusted trial balance of Waller Corporation as of
December 31, 20xx.
Partial Adjusted Trial Balance
Account
Debit
Credit
Common Stock—$10 par value, 90,000 shares authorized, 40,000
shares issued and outstanding
400,000
Preferred Stock—$100 par value, 7 percent cumulative, 50,000 shares
authorized, 8,000 shares issued and outstanding
800,000
Additional Paid-in Capital, Preferred
30,000
Additional Paid-in Capital, Common
200,000
Retained Earnings
100,000
40. The information that follows pertains to stockholders’ equity data of Delano Corporation on December
31, 20xx. Compute the amount of each item indicated by a letter in the listing below.
Par value per common share
$ 10
Balance of Common Stock account
$150,000
No. of shares authorized
20,000
No. of shares issued and outstanding
a
Balance of Additional Paid-in Capital account
$ b
Balance of Retained Earnings account
$ 80,000
Total contributed capital
$ c
Total stockholders’ equity
$300,000
41. The information that follows pertains to stockholders’ equity data of the Keswick Corporation on
December 31, 20xx. Compute the amount of each item indicated by a letter in the listing below. Round
answers to two decimal places.
Par value per common share
$ 20
Balance of Common Stock account
$ a
No. of shares authorized
20,000
No. of shares issued and outstanding
15,000
Balance of Additional Paid-in Capital account
$ b
Balance of Retained Earnings account
$ 50,000
Average issuance price per share of common stock
$ c
Total stockholders’ equity
$510,000
42. Millwood Corporation had the following stock outstanding for years 2007 through 2010:
Preferred Stock—$100 par value, 8 percent cumulative, 10,000 shares authorized, 4,000 shares issued
and outstanding
Common Stock—$20 par value, 10,000 shares authorized, 6,000 shares issued and outstanding
Millwood paid $15,000, $30,000, $100,000, and $130,000 in cash dividends during 2007, 2008, 2009,
and 2010, respectively.
a. Calculate the total cash dividends received by owners of preferred and common stock in each year.
b. Now assume that the preferred stock is noncumulative rather than cumulative. Calculate the total
cash dividends received by owners of preferred and common stock in each year.
43. Acton Corporation had the following stock outstanding for years 2007 through 2010:
Preferred Stock—$100 par value, 7 percent cumulative, 10,000 shares authorized, 5,000 shares issued
and outstanding
Common Stock—$20 par value, 10,000 shares authorized, 7,000 shares issued and outstanding
Acton paid $20,000, $30,000, $100,000, and $15,000 in cash dividends during 2007, 2008, 2009, and
2010, respectively.
a. Calculate the total cash dividends received by owners of preferred and common stock in each year.
b. Now assume that the preferred stock is noncumulative rather than cumulative. Calculate the total
cash dividends received by owners of preferred and common stock in each year.
44. Kagel Corporation had 30,000 shares of $5 par value common stock issued and outstanding on
December 31, 2009. Each share was issued during 2007 at $14 per share. Prepare the entries in journal
form without explanations for the following transactions occurring in 2010:
Jan.
4
Purchased 5,000 shares of treasury stock for $16 per share. This is the first
transaction involving its own stock ever engaged in by the company.
31
Sold 1,000 shares of treasury stock for $15 per share.
Feb.
20
Sold 1,000 shares of treasury stock for $18 per share.
Mar.
16
Sold 1,000 shares of treasury stock for $11 per share.
Apr.
5
Retired 2,000 shares of treasury stock.
May
8
Purchased 500 shares of treasury stock for $12 per share.
31
Retired the 500 shares of treasury stock purchased on May 8.
General Journal
Page 1
Date
Description
Post.
Ref.
Debit
Credit
45. Baird Corporation had 60,000 shares of $5 par value common stock issued and outstanding on
December 31, 2009. Each share was issued during 2007 at $14 per share. Prepare the entries in journal
form without explanations for the following transactions occurring in 2010:
Jan.
4
Purchased 10,000 shares of treasury stock for $16 per share. This is the first
transaction involving its own stock ever engaged in by the company.
31
Sold 2,000 shares of treasury stock for $15 per share.
Feb.
20
Sold 2,000 shares of treasury stock for $18 per share.
Mar.
16
Sold 2,000 shares of treasury stock for $11 per share.
Apr.
5
Retired 4,000 shares of treasury stock.
May
8
Purchased 1,000 shares of treasury stock for $12 per share.
31
Retired the 1,000 shares of treasury stock purchased on May 8.
General Journal
Page 1
Date
Description
Post.
Ref.
Debit
Credit
Cash
Retained Earnings ($16,000 – $15,000)
Paid-in Capital, Treasury Stock
($18,000 – $16,000)
Paid-in Capital, Treasury Stock (from 2/20)
Retained Earnings ($16,000 – $13,000)
Retained Earnings ($32,000 – $28,000)
Cash
Paid-in Capital, Retirement of Stock
($7,000 – $6,000)
Cash (2,000 $18)
Cash (2,000 $11)
