11–60
PROBLEM 11-22A (cont.)
c.
Brice Company
December 31, 2016
Stockholders’ Equity
Preferred Stock, $20 par value, 6%, 8,000
shares issued and outstanding
$160,000
Common Stock, no par value, 88,000 shares
issued and outstanding
448,000
Total Paid-In Capital
$608,000
Retained Earnings
10,400
Total Stockholders’ Equity
$618,400
factors.
11–61
PROBLEM 11-23A
a.
Sun Corporation
General Journal
Date
Account Titles
Debit
Credit
2016
Jan. 5
Cash (6,000 x $15)
90,000
Common Stock, $10 par
60,000
PIC in Excess of Par−CS
30,000
Jan. 12
Cash (1,000 x $55)
55,000
Preferred Stock, $50 par
50,000
PIC in Excess of Par−PS
5,000
Apr. 5
Cash (30,000 x $21)
630,000
Common Stock, $10 Par
300,000
PIC in Excess of Par−CS
330,000
Dec. 31
Cash
150,000
Service Revenue
150,000
Dec. 31
Operating Expenses
88,000
Cash
88,000
Dec. 31
Dividends ($50 x 5% x 1,000)
2,500
Dividends Payable
2,500
Closing Entries
Dec. 31
Service Revenue
150,000
Retained Earnings
150,000
Dec. 31
Retained Earnings
88,000
Operating Expenses
88,000
Dec. 31
Retained Earnings
2,500
Dividends
2,500
11–62
PROBLEM 11-23A a. (cont.)
Sun Corporation
General Journal
Date
Account Titles
Debit
Credit
2017
Feb. 15
Dividends Payable
2,500
Cash
2,500
Mar. 3
Cash (15,000 x $53)
795,000
Preferred Stock, $50 par
750,000
PIC in Excess of Par−PS
45,000
May 5
Treasury Stock (Common) (900 x $24)
21,600
Cash
21,600
Dec. 31
Cash
210,000
Service Revenue
210,000
Dec. 31
Operating Expenses
98,000
Cash
98,000
Dec. 31
Dividends
57,550*
Dividends Payable
57,550
Closing Entries
Dec. 31
Service Revenue
210,000
Retained Earnings
210,000
Dec. 31
Retained Earnings
98,000
Operating Expenses
98,000
Dec. 31
Retained Earnings
57,550
Dividends
57,550
11–63
PROBLEM 11-23A a. (cont.)
Sun Corporation T-Accounts for 2016
Cash
Dividends Payable
Retained Earnings
2016
2016
2016
1/5 90,000
12/31 88,000
12/31 2,500
cl 88,000
cl 150,000
1/12 55,000
Bal. 2,500
cl 2,500
4/5 630,000
Bal. 59,500
12/31 150,000
Bal. 837,000
Preferred Stock
1/12 50,000
Bal. 50,000
Common Stock
1/5 60,000
4/5 300,000
Bal. 360,000
PIC in Exc. of Par Pref. Stk.
1/12 5,000
Bal. 5,000
PIC in Exc. of Par Com. Stk.
1/5 30,000
4/5 330,000
Bal. 360,000
Dividends
12/31 2,500
cl 2,500
Bal. -0-
Service Revenue
cl 150,000
12/31 150,000
Bal. -0-
Operating Expenses
12/31 88,000
cl 88,000
11–64
Bal. -0-
11–65
PROBLEM 11-23A a. (cont.)
Sun Corporation T-Accounts for 2017
Cash
Dividends Payable
Retained Earnings
2017
2017
2017
Bal. 837,000
2/15 2,500
Bal. 2,500
Bal. 59,500
3/3 795,000
5/5 21,600
2/15 2,500
12/31 57,550
cl 98,000
cl 210,000
12/31 210,000
12/31 98,000
Bal. 57,550
cl 57,550
Bal. 1,719,900
Bal. 113,950
Preferred Stock
Bal. 50,000
3/3 750,000
Bal. 800,000
Common Stock
Bal. 360,000
PIC in Exc. of Par Pref. Stk.
Bal. 5,000
3/3 45,000
Bal. 50,000
PIC in Exc. of Par Com. Stk.
Bal. 360,000
Dividends
12/31 57,550
cl 57,550
Bal. -0-
Treasury Stock
5/5 21,600
Bal. 21,600
Service Revenue
cl 210,000
12/31 210,000
Bal. -0-
Operating Expenses
12/31 98,000
cl 98,000
11–66
Bal. -0-
11–67
PROBLEM 11-23A (cont.)
b.
Sun Corporation
Balance Sheet
As of December 31, 2016
Assets
Cash
$837,000
Total Assets
$837,000
Liabilities
Dividends Payable
$ 2,500
Total Liabilities
$ 2,500
Stockholders’ Equity
Preferred Stock, $50 par value, 5%
cumulative, 50,000 shares authorized,
1,000 shares issued and outstanding
$ 50,000
Common Stock, $10 par value, 100,000 shares
authorized, 35,000 shares issued and
outstanding
360,000
Paid-In Capital in Excess of Par−Preferred Stock
5,000
Paid-In Capital in Excess of Par−Common Stock
360,000
Total Paid-In Capital
775,000
Retained Earnings
59,500
Total Stockholders’ Equity
834,500
Total Liabilities and Stockholders’ Equity
$837,000
11–68
PROBLEM 11-23A (cont.)
b.
Sun Corporation
Balance Sheet
As of December 31, 2017
Assets
Cash
$1,719,900
Total Assets
$1,719,900
Liabilities
Dividends Payable
$ 57,550
Total Liabilities
$ 57,550
Stockholders’ Equity
Preferred Stock, $50 par value, 5%
cumulative, 50,000 shares authorized,
16,000 shares issued and outstanding
$800,000
Common Stock, $10 par value, 100,000 shares
authorized, 36,000 shares issued and 35,100
outstanding
360,000
Paid-In Capital in Excess of Par−Preferred Stock
50,000
Paid-In Capital in Excess of Par−Common Stock
360,000
Total Paid-In Capital
1,570,000
Retained Earnings
113,950
Less: Treasury Stock
(21,600)
Total Stockholders’ Equity
1,662,350
Total Liabilities and Stockholders’ Equity
$1,719,900
11–69
PROBLEM 11-23A (cont.)
c.
Schedule of Number of
Shares of Common Stock
Shares
Issued
Shares
Outstanding
2016
Jan. 5
6,000
6,000
Apr. 5
30,000
30,000
Totals
36000
36,000
2017
May 5
(900)
Totals
36,000
35,100
Shares issued and outstanding are the same for 2016. However, for 2017,
the 900 shares of treasury stock reduce the number of outstanding shares.
In 2017, there are 36,000 shares issued but only 35,100 outstanding.
11–70
PROBLEM 11-24A
a.
Choctaw Co. General Journal for 2016
Date
Account Titles
Debit
Credit
1.
Cash (20,000 x $10)
200,000
Common Stock, $10 par
200,000
2.
Cash (3,000 x $20)
60,000
Preferred Stock, $20 stated value
60,000
3.
Treasury Stock (Common Stock) (1,000 x $12)
12,000
Cash
12,000
4.
Dividends
2,000
Dividends Payable
2,000
5.
Cash (500 x $14)
7,000
Treasury Stock (500 x $12)
6,000
PIC in Excess of Cost−TS
1,000
6.
Dividends Payable
2,000
Cash
2,000
7.
Cash
78,000
Service Revenue
78,000
Operating Expenses
41,000
Cash
41,000
Closing Entries
8.
Service Revenue
78,000
Retained Earnings
78,000
Retained Earnings
41,000
Operating Expenses
41,000
Retained Earnings
2,000
Dividends
2,000
9.
Retained Earnings
8,000
Appropriated Retained Earnings
8,000
11–71
11–72
PROBLEM 11-24A a. (cont.)
Choctaw Co. T-Accounts for 2016
Cash
Dividends Payable
Retained Earnings
1. 200,000
3. 12,000
6. 2,000
4. 2,000
cl 8. 43,000
cl 8 78,000
2. 60,000
6. 2,000
Bal. -0-
cl 9. 8,000
5. 7,000
7. 41,000
Bal. 27,000
7. 78,000
Bal. 290,000
Appropriated Retained Earn.
cl 9. 8,000
Bal. 8,000
Preferred Stock
2. 60,000
Bal. 60,000
Common Stock
1. 200,000
Bal. 200,000
PIC in Exc. of Cost TS
5. 1,000
Bal. 1,000
Treasury Stock
3. 12,000
5. 6,000
Bal. 6,000
Dividends
4. 2,000
cl 8. 2,000
Bal. -0-
Service Revenue
cl 8. 78,000
7. 78,000
Bal. -0-
Operating Expenses
7. 41,000
cl 8. 41,000
Bal. -0-
11–73
PROBLEM 11-24A (cont.)
b.
Choctaw Co.
Balance Sheet
As of December 31, 2016
Assets
Cash
$290,000
Total Assets
$290,000
Liabilities
$ -0-
Stockholders’ Equity
Preferred Stock, $20 stated value, 3,000 shares
issued and outstanding
$ 60,000
Common Stock, $10 par value, 20,000 shares
issued and 19,500 shares outstanding
200,000
Paid-In Capital in Excess of Cost−Treasury Stock
1,000
Total Paid-In Capital
261,000
Retained Earnings
Appropriated
$ 8,000
Unappropriated
27,000
Total Retained Earnings
35,000
Less: Treasury Stock (500 shares)
(6,000)
Total Stockholders’ Equity
290,000
Total Liabilities and Stockholders’ Equity
$290,000
11-104
PROBLEM 11-25A
a. $200,000 10,000 shares = $20 per share
b. $20 par value per share x 6% = $1.20 per share
c. $1,000,000 + $500,000 = $1,500,000;
e. 1. 100,000 x 2 = 200,000 shares outstanding after the split.
2. No amount will be transferred from retained earnings.
3. Theoretically, the market price will be $21 ($42 2).
11-105
PROBLEM 11-26A
Sequoia, Inc.
Statements Model
Balance Sheet
Income Statement
Stmt. of
Event
Assets
=
Liab.
+
S. Equity
Rev.
−
Exp.
=
Net Inc.
Cash Flow
1.
+
NA
+
NA
NA
NA
+ FA
2.
+
NA
+
NA
NA
NA
+ FA
3.
+
NA
+
NA
NA
NA
+ FA
4.
−
NA
−
NA
NA
NA
− FA
5.
+
NA
+
NA
NA
NA
+ FA
6.
NA
+
−
NA
NA
NA
NA
7.
NA
NA
NA
NA
NA
NA
NA
8.
NA
NA
+−
NA
NA
NA
NA
9.
NA
NA
+−
NA
NA
NA
NA
10.
−
−
NA
NA
NA
NA
− FA