Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
156.
A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:
(a)
Purchased 1,500 shares of treasury stock at $16. The treasury stock is accounted for by the
cost method. There were no previous purchases of treasury shares.
(b)
Sold 1,000 shares of treasury stock at $19.
(c)
Purchased equipment for $80,000, paying $25,000 in cash and issuing 4,000 shares of
common stock for the remaining.
(d)
Sold 500 shares of treasury stock at $14.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
157.
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
Total
Per Share
Total
Per Share
1
_______
_______
_______
_______
2
_______
_______
_______
_______
3
_______
_______
_______
_______
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
158.
Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par
common stock. The following amounts were distributed as dividends:
Year 1:
$10,000
Year 2:
45,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for each year.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
159.
The dates of importance in connection with a cash dividend of $50,000 on a corporation’s common stock are January
15, February 15, and March 15. Journalize the entries required on each date.
160.
Vincent Corporation has 100,000 shares of $100 par common stock outstanding. On June 30, Vincent
Corporation
declared a 5% stock dividend to be issued on July 30 to stockholders of record July 15. The market
price of the
stock was $132 a share on June 30. Journalize the entries required on June 30, July 15, and July 30.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
161.
Sabas Company has 40,000 shares of $100 par, 1% preferred stock and 100,000 shares of $50 par common
stock. The following amounts were distributed as dividends:
Year 1:
$ 50,000
Year 2:
90,000
Year 3:
130,000
Determine the dividends per share for preferred and common stock for each year.
$ 90,000
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
162.
Indicate whether the following actions would (+) increase, (–) decrease, or (0) not affect a company’s total assets,
liabilities, and stockholders‘ equity.
Assets
Liabilities
Stockholders‘
Equity
(1)
Declaring a cash dividend
_______
_______
_______
(2)
Paying the cash dividend declared in (1)
_______
_______
_______
(3)
Declaring a stock dividend
_______
_______
_______
(4)
Issuing stock certificates for the stock
dividend declared in (3)
_______
_______
_______
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
163.
The following account balances appear on the balance sheet of Osgood Industries:
Common Stock (300,000 shares authorized, $100 par): $10,000,000
Paid-In Capital in Excess of Par—Common Stock: $2,000,000
Retained Earnings: $45,000,000
The board of directors declared a 2% stock dividend when the market price of the stock was $135 a share.
Required:
(1)
Journalize the entries to record
(a)
the declaration of the dividend, capitalizing an amount equal to market value
(b)
the issuance of the stock certificates
(2)
Determine the following amounts before the stock dividend was declared:
(a)
Total paid–in capital
(b)
Total retained earnings
(c)
Total stockholders’ equity
(3)
Determine the following amounts after the stock dividend was declared and closing
entries were recorded at the end of the year:
(a)
Total paid–in capital
(b)
Total retained earnings
(c)
Total stockholders’ equity
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
164.
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
Required:
Determine the dividends per share for preferred and common stock for each year.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
165.
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.
Required: Journalize the entries required on February 13, March 14, and April 30.
166.
The following transactions took place for the XYZ Corporation:
November 12 – Declared a total cash dividend of $45,000 for stockholders of record November 20 payable on
December 1. Record the journal entries required by these events.
Briefly describe the significance of November 20.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
167.
Sabas Company has 20,000 shares of $100 par, 1% noncumulative preferred stock and 100,000 shares of $50 par
common stock. The following amounts were distributed as dividends:
Year 1:
$10,000
Year 2:
15,000
Year 3:
90,000
Determine the dividends per share for preferred and common stock for each year.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
168.
On January 1, Year 1, a company had the following transactions:
–
Issued 10,000 shares of $2.00 par common stock for $12.00 per share.
–
Issued 3,000 shares of $50 par, 6% cumulative preferred stock for $70 per share.
–
Purchased 1,000 shares of previously issued common stock for $15.00 per share.
The company had the following dividend information available:
Year 1 – No dividend paid
Year 2 – Paid a $2,000 total dividend
Year 3 – Paid a $20,000 total dividend
Year 4 – paid a $25,000 total dividend
Using the following format, fill in the correct values for each year:
Year 1
Year 2
Year 3
Year 4
Common stock dividend
Preferred stock dividend
Dividends in arrears
Dividends in arrears
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
169.
Journalize the following selected transactions completed during the current fiscal year:
Mar. 4 The board of directors of New Town, Inc. declared a stock split that reduced the par
of common shares from $100 to $20. This action increased the number of outstanding
shares to 500,000.
26 Declared a dividend of $1.75 per share on the outstanding shares of common stock.
Apr. 5 Paid the dividend declared on March 26.
Nov. 1 Declared a 5% stock dividend on the common stock outstanding (the fair market value
of the stock to be issued is $25).
Dec. 1 Issued the certificates for the common stock dividend declared on November 1.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
170.
Prepare entries to record the following selected transactions completed during the current fiscal year:
Feb. 1 The board of directors declared a stock split which reduced the par of common shares
from $100 to $20. This action increased the number of outstanding shares to 500,000.
11 Purchased 25,000 shares of the company’s own stock at $44, recording the treasury
stock at cost.
May 1 Declared a dividend of $2.50 per share on the outstanding shares of common stock.
15 Paid the dividend declared on May 1.
Oct. 19 Declared a 2% stock dividend on the common stock outstanding (the fair market value
of the stock to be issued is $55).
Nov. 12 Issued the certificates for the common stock dividend declared on October 19.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
171.
Journalize the following selected transactions completed during the current fiscal year:
Jan. 3 The board of directors declared a stock split that reduced the par of common shares
from $100 to $20. This action increased the number of outstanding shares to 400,000.
22 Declared a dividend of $1.75 per share on the outstanding shares of common stock.
Feb. 8 Paid the dividend declared on January 22.
Sept. 1 Declared a 5% stock dividend on the common stock outstanding (the fair market value
of the stock to be issued is $30).
Oct. 1 Issued the certificates for the common stock dividend declared on September 1.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
172.
Selected transactions completed by Breezeway Construction during the current fiscal year are as follows:
February 3
Split the common stock 2-for-1 and reduced the par from $40 to $20
per share. After the split, there were 250,000 common shares
outstanding.
April 10
Declared semiannual dividends of $1.50 on 18,000 shares of preferred
stock and $0.08 on the common stock to stockholders of record on
May 10, payable on June 9.
June 9
Paid the cash dividends.
October 10
Declared semiannual dividends of $1.50 on the preferred stock and
$0.04 on the common stock (before the stock dividend). In addition, a
2% common stock dividend was declared on the common stock
outstanding. The fair market value of the common stock is estimated
at $36.
December 9
Paid the cash dividends and issued the certificates for the common
stock dividend.
Required: Journalize the transactions.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
173.
On February 1, Marine Company reacquired 7,500 shares of its common stock at $30 per share. On March 15,
Marine sold 4,500 of the reacquired shares at $34 per share. On June 2, Marine sold the remaining shares at $28
per share.
Required: Journalize the transaction of February 1, March 15, and June 2.