Title: Problem 13-3A
QA_Ori:
Part 1
Explanations for each of the journal entries
Oct. 2 Declared a cash dividend of $2 per share of common stock. ($60,000 /
30,000 shares)
Part 2
Oct. 2 Oct. 25 Oct. 31 Nov. 5 Dec. 1 Dec. 31
Common stock $360,000 $360,000 $360,000 $396,000 $396,000 $396,000
Common stock
Title: Problem 13-4A
QA_Ori:
Part 1
Outstanding common shares
Jan. 5 Apr. 5 July 5 Oct. 5
Beginning balance 40,000 40,000 40,000 40,000
Part 2
Cash dividend amounts
Jan. 5 Apr. 5 July 5 Oct. 5
Outstanding shares 40,000 37,000 37,000 44,400
Part 3
QA_Ori:
Capitalization of retained earnings for small stock dividend
Part 4
Cost per share of treasury stock
Part 5
Net income
Retained earnings, beginning balance $320,000
Less dividends: Jan. 5 (20,000)
Title: Problem 13-5A
QA_Ori:
1. Market price = $85 per share (current stock exchange price given)
2. Computation of par values of stock
3. Book values with no dividends in arrears
Book value per preferred share = par value (when not callable) = $50
4. Book values with two years’ dividends in arrears
Preferred stock
shares)
Common stock
Total equity $280,000
shares)
5. Book values with call price and two years’ dividends in arrears
Preferred stock
Common stock
Total equity $280,000
sh.)
6. Dividend allocation in total
Preferred Common Total
2 years’ dividends in arrears $ 5,000 $ 0 $ 5,000
$4,000 / 4,000 shares = $1.00
7. Equity represents the residual interest of owners in the assets of the business
Title: Problem 13-1B
QA_Ori:
Part 1
a. To record sale of 3,000 ($3,000/$1 per share) shares of $1 par value common
b. To record issuance of 1,000 ($1,000/$1 per share) shares of $1 par value
c. To record acquisition of assets and liabilities by issuing 800 ($800/$1 per share)
Part 2
Number of outstanding shares
Issued in (a) 3,000
Part 3
Minimum legal capital = Outstanding shares x Par value per share
Part 4
Total paid-in capital from common stockholders
From transaction (a) $120,000
Part 5
Book value per common share
Title: Problem 13-2B
QA_Ori:
Part 1
Jan. 10 Treasury Stock, Common 480,000
Mar. 2 Retained Earnings 240,000
Mar. 31 Common Dividend Payable 240,000
Nov. 11 Cash* 312,000
Treasury Stock, Common** 288,000
Nov. 25 Cash* 152,000
Paid-In Capital, Treasury Stock 24,000
Dec. 1 Retained Earnings 500,000
Dec. 31 Income Summary 1,072,000
Part 2
BALTHUS CORP.
Statement of Retained Earnings
For Year Ended December 31, 2014
Retained earnings, December 31, 2013 $2,160,000
Part 3
BALTHUS CORP.
Stockholders’ Equity Section of the Balance Sheet
December 31, 2014
Common stock$1 par value, 320,000 shares
Title: Problem 13-3B
QA_Ori:
Part 1
Explanations for each of the journal entries
Jan. 17 Declared a cash dividend of $1 per share of common stock. ($96,000 /
96,000 shares)
Feb. 5 Paid the cash dividend on common stock.
Part 2
Jan. 17 Feb. 5 Feb. 28 Mar. 14 Mar. 25 Mar. 31
Common stock $
960,000
$ 960,000 $ 960,000 $1,080,000 $1,080,000 $1,080,000
0
Title: Problem 13-4B
QA_Ori:
Part 1
Outstanding common shares
Feb. 15 May 15 Aug. 15 Nov. 15
Beginning balance 17,000 17,000 17,000 17,000
Part 2
Cash dividend amounts
Feb. 15 May 15 Aug. 15 Nov. 15
Part 3
Capitalization of retained earnings for small stock dividend
Part 4
Cost per share of treasury stock
Part 5
Net income
Retained earnings, beginning balance $270,000
Title: Problem 13-5B
QA_Ori:
2. Computation of stock par values
3.
Book values with no dividends in arrears
Book value per preferred share = par value (when not callable) = $ 250
Common stock
4. Book values with two years’ dividends in arrears
Preferred stock
Preferred stock par value $ 375,000
Common stock
Total equity $2,400,000
5.
Book values with call price and two years’ dividends in arrears
Preferred stock
Preferred stock call price (1,500 x $280) $ 420,000
Common stock
Total equity $2,400,000
6.
Dividend allocation in total
Preferred Common Total
2 years’ dividends in arrears $ 60,000 $ 0 $ 60,000
Dividends per share for the common stock
7. Equity represents the residual interest of owners in the assets of the business after
subtracting claims of creditors. With few exceptions, these assets and liabilities are