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E13-21 Journalizing issuance of stock
Learning Objective 2
Steller Systems completed the following stock issuance transactions:
May 19 Issued 1,700 shares of $3 par value common stock for cash of $10.50 per share.
Jun. 3 Issued 300 shares of $9, no-par preferred stock for $15,000 cash.
11 Received equipment with a market value of $68,000 in exchange for 5,000 shares
of the $3 par value common stock.
Requirements
1. Journalize the transactions. Explanations are not required.
2. How much paid-in capital did these transactions generate for Steller Systems?
E13-21 , cont.
SOLUTION
Requirement 1
E13-22 Journalizing issuance of no-par stock
Learning Objective 2
1. a. Cash $104,000
Eates Corp. issued 8,000 shares of no-par common stock for $13 per share.
Requirements
1. Record issuance of the stock if the stock:
a. is true no-par stock.
b. has stated value of $3 per share.
2. Which type of stock results in more total paid-in capital?
SOLUTION
Requirement 1
E13-23 Journalizing issuance of stock and preparing the stockholders’ equity section of the
balance sheet
Learning Objective 2
2. Total Stockholders’ Equity $94,500
The charter for ASAP-TV, Inc. authorizes the company to issue 100,000 shares of $5, no-par
preferred stock and 500,000 shares of common stock with $1 par value. During its start-up phase,
ASAP-TV completed the following transactions:
Sep. 6 Issued 550 shares of common stock to the promoters who organized the
corporation, receiving cash of $16,500.
12 Issued 400 shares of preferred stock for cash of $23,000.
14 Issued 1,500 shares of common stock in exchange for land with a market
value of $17,000.
Requirements
1. Record the transactions in the general journal.
2. Prepare the stockholders’ equity section of the ASAP-TV balance sheet at September 30,
2018, assuming ASAP-TV, Inc. had net income of $38,000 for the month.
SOLUTION
E13-24 Journalizing issuance of stock and preparing the stockholders’ equity section of the
balance sheet
Learning Objective 2
March 23 Common Stock $690
The charter of Evergreen Corporation authorizes the issuance of 900 shares of preferred stock
and 1,400 shares of common stock. During a two-month period, Evergreen completed these
stock-issuance transactions:
Mar. 23 Issued 230 shares of $3 par value common stock for cash of $15 per share.
Apr. 12 Received inventory with a market value of $27,000 and equipment with a market
value of $19,000 for 320 shares of the $3 par value common stock.
17 Issued 900 shares of 5%, $20 par value preferred stock for $20 per share.
Requirements
1. Record the transactions in the general journal.
2. Prepare the stockholders’ equity section of the Evergreen balance sheet as of April 30, 2018,
for the transactions given in this exercise. Retained Earnings has a balance of $73,000 at April
30, 2018.
E13-24. cont.
SOLUTION
Requirement 1
Requirement 2
Journalizing treasury stock transactions and reporting stockholders’ equity
Learning Objective 3
2. Total Stockholders’ Equity $52,000
Southern Amusements Corporation had the following stockholders’ equity on November 30:
On December 30, Southern purchased 200 shares of treasury stock at $15 per share.
Requirements
1. Journalize the purchase of the treasury stock.
2. Prepare the stockholders’ equity section of the balance sheet at December 31, 2018. Assume
the balance in retained earnings is unchanged from November 30.
3. How many shares of common stock are outstanding after the purchase of treasury stock?
SOLUTION
Requirement 1
E13-26 Journalizing issuance of stock and treasury stock transactions
Learning Objectives 2, 3
May 22 Treasury Stock $16,900
Stock transactions for Careful Driving School, Inc. follow:
Mar. 4 Issued 27,000 shares of $1 par value common stock at $10 per share.
May 22 Purchased 1,300 shares of treasury stock—common at $13 per share.
Sep. 22 Sold 500 shares of treasury stock—common at $23 per share.
Oct. 14 Sold 800 shares of treasury stock—common at $9 per share.
Journalize the transactions.
SOLUTION
E13-27 Computing dividends on preferred and common stock and journalizing
Learning Objective 4
1. Preferred Dividend 2018 $9,000
Northern Communications has the following stockholders’ equity on December 31, 2018:
Requirements
1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred
stockholders and to common stockholders for 2018 and 2019 if total dividends are $9,000 in
2018 and $45,000 in 2019. Assume no changes in preferred stock and common stock in 2019.
2. Record the journal entries for 2018, assuming that Northern Communications declared the
dividend on December 1 for stockholders of record on December 10. Northern
Communications paid the dividend on December 20.
SOLUTION
Requirement 1
E13-27, cont.
Requirement 2
E13-28 Computing dividends on preferred and common stock and journalizing
Learning Objective 4
2. July 1 Cash Dividends $185,000
The following elements of stockholders’ equity are from the balance sheet of Sneed Marketing
Corp. at December 31, 2017:
Sneed paid no preferred dividends in 2017.
Requirements
1. Compute the dividends to the preferred and common shareholders for 2018 if total dividends
are $185,000 and assuming the preferred stock is noncumulative. Assume no changes in
preferred and common stock in 2018.
2. Record the journal entries for 2018 assuming that Sneed Marketing Corp. declared the
dividends on July 1 for stockholders of record on July 15. Sneed paid the dividends on July
31.
E13-28, cont.
SOLUTION
