Exercise 10-22A, Obj. 2, 6
Student Name
Course Name
Student ID:
Date:
Pinkerton Stores is authorized to issue 13,000 shares of common stock.
During a two month period, the business completed the following stock issuance
transactions:
March 23 Issued 3,000 shares of $6.00 par common stock for cash of $15.50 per
share.
April 12 Received inventory with a market value of $20,000 and equipment with market
value of $39,000 for 3,100 shares of the $6.00 par common stock.
Exercise 10-22A
Instructions
1. Journalize the transactions.
2.
Requirement 1
DATE DEBIT CREDIT
23-Mar
12-Apr
Financial Accounting
Test Your Knowledge
Prepare the stockholders’ equity section of Pinkerton Stores’ balance sheet for the transactions given
in this exercise. Retained earnings has a balance of $46,000.
Journal
Students: Please fill-in areas that are shaded
in light yellow.
Account for issuance of stock; report stockholders’ equity
ACCOUNT TITLES AND EXPLANATION
Requirement 2
Stockholders’ equity:
Common stock, $6.00 par, 13,000 shares authorized,
6,100 shares issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,600$
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FORMULA
Enter complete description here – more than the account name
Enter complete description here – more than the account name
Exercise 10-22A, Obj. 2, 6
Student Name
Course Name
Student ID:
Date:
Pinkerton Stores is authorized to issue 13,000 shares of common stock.
During a two month period, the business completed the following stock issuance
transactions:
March 23 Issued 3,000 shares of $6.00 par common stock for cash of $15.50 per
share.
April 12 Received inventory with a market value of $20,000 and equipment with market
value of $39,000 for 3,100 shares of the $6.00 par common stock.
Exercise 10-22A
Instructions
1. Journalize the transactions.
2.
Requirement 1
DATE DEBIT CREDIT
23-Mar 46,500
18,000
Financial Accounting
Test Your Knowledge
Prepare the stockholders’ equity section of Pinkerton Stores’ balance sheet for the transactions
given in this exercise. Retained earnings has a balance of $46,000.
Journal
ACCOUNT TITLES AND EXPLANATION
Common Stock
Students: Please fill-in areas that are
shaded in light yellow.
Account for issuance of stock; report stockholders’ equity
Cash
Paid-in-Capital in Excess of Par – Commom
Common Stock
Paid-in-Capital in Excess of Par – Common
Requirement 2
Stockholders’ equity:
Common stock, $6.00 par, 13,000 shares authorized,
6,100 shares issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,600$
Exercise 10-25A, Obj. 3, 6
Student Name
Course Name
Student ID:
Date:
Inventory………………………………… 654$ Common stock, $2.50 par
Property, plant, and per share, 800 shares
equipment, net ………..…………....
950 authorized, 250 shares
Paid-in capital in excess of par ……. 900 issued ………..………………. 625$
Treasury stock, Retained earnings….………… 2,222
140 shares at cost………………….. 1,890 Accounts receivable, net …… 600
Accumulated other Notes payable …………..……. 1,166
comprehenive income (loss)…….
(730) *
*Debit balance
Students: Please fill-in areas
that are shaded light-yellow.
Financial Accounting
Show how treasury stock affects a company; prepare the
stockholders’ equity section of a balance sheet
Alistair Software had the following selected account balances at December 31, 2016 (in thousands, except
par value per share).
Exercise 10-25A
Instructions:
1. Prepare the stockholders’ equity section of Alistair’s balance sheet (in thousands).
2. How can Alistair have a larger balance of treasury stock than the sum of Common Stock and
Paid-in Capital in Excess of Par?
Requirement
Common stock, $2.50 par, 800 shares authorized,250 shares issued……………. 625$
Paid in capital in excess of par…………………………………………………………………………. 900
Accumulated other comprehensive income (loss)………….
Total stockholders‘ equity…………………………………………………………………………
Enter explanation here.
Test Your Knowledge
Stockholders’ Equity (Thousands)
Exercise 10-25A, Obj. 3, 6
Student Name
Course Name
Student ID:
Date:
Inventory………………………………… 654$ Common stock, $2.50 par
Property, plant, and per share, 800 shares
equipment, net ………..…………....
950 authorized, 250 shares
Paid-in capital in excess of par ……. 900 issued ………..………………. 625$
Financial Accounting
Show how treasury stock affects a company; prepare the
stockholders’ equity section of a balance sheet
Alistair Software had the following selected account balances at December 31, 2016 (in thousands, except par
value per share).
Students: Please fill-in areas that
are shaded light-yellow.
BU 122 ID 50003
Exercise 10-25A
Instructions:
1. Prepare the stockholders’ equity section of Alistair’s balance sheet (in thousands).
2. How can Alistair have a larger balance of treasury stock than the sum of Common Stock and
Paid-in Capital in Excess of Par?
Requirement
Common stock, $2.50 par, 800 shares authorized,250 shares issued……………. 625$
Paid in capital in excess of par…………………………………………………………………………. 900
Retained Earnings 2,222
Stockholders’ Equity (Thousands)
Test Your Knowledge
BU 122 ID 50003
Problem 10-72A, Obj. 2, 6
Student Name
Course Name
Student ID:
Date:
Mar 6 Issued 1,000 shares of common stock to the promoter for
assistance with issuance of the common stock. The promotional
fee was $27,000. Debit Organization Expense.
9 Issued 10,000 shares of common stock to Jenny Collins and 20,000
shares to Pam Lane in return for cash equal to the stock’s market
value of $10 per share. The two women were partners in Lane
Rafts Co.
26 Issued 1,500 shares of common stock for $22 cash per share.
Students: Please fill-in areas that are
shaded in light yellow.
Account for stock issuance; report stockholders’ equity
Financial Accounting
The partners who own Lane Rafts wished to avoid the unlimited personal liability of the
partnership form of business, so they incorporated as Lane Rafts, Inc. The charter from the
state of Califirnia authorizes the corporation to issue 160,000 shares of $6 par common stock. In its
first month, Lane Rafts completed the following transactions:
Problem 10-72A
Instructions
1. Record the transactions in the journal.
2. Prepare the stockholders’ equity section of the Lane Rafts, Inc., balance sheet at
March 31, 2017. The ending balance of Retained Earnings is $90,000.
Requirement 1
DATE DEBIT CREDIT
Mar 6
9
26
Requirement 2
Stockholders’ equity:
Common stock, $6 par, 160,000 shares authorized,
32,500 shares issued* …………………………………………………………………………… 195,000$
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FORMULA
Enter explanation here.
Lane Rafts, Inc.
Enter explanation here.
Enter explanation here.
Balance Sheet (partial)
March 31, 2017
Test Your Knowledge
Journal
ACCOUNT TITLES AND EXPLANATION
Problem 10-72A, Obj. 2, 6
Student Name
Course Name
Student ID:
Date:
Mar 6 Issued 1,000 shares of common stock to the promoter for
assistance with issuance of the common stock. The promotional
fee was $27,000. Debit Organization Expense.
Financial Accounting
Students: Please fill-in areas that are
shaded in light yellow.
Account for stock issuance; report stockholders’ equity
The partners who own Lane Rafts wished to avoid the unlimited personal liability of the
partnership form of business, so they incorporated as Lane Rafts, Inc. The charter from the
state of Califirnia authorizes the corporation to issue 160,000 shares of $6 par common stock. In its
first month, Lane Rafts completed the following transactions:
Problem 10-72A
Instructions
1. Record the transactions in the journal.
2.
Prepare the stockholders’ equity section of the Lane Rafts, Inc., balance sheet at
March 31, 2017. The ending balance of Retained Earnings is $90,000.
Requirement 1
DATE DEBIT CREDIT
Mar 6 27,000
Test Your Knowledge
Journal
ACCOUNT TITLES AND EXPLANATION
Organization Expense
Common Stock (1,000 x $6)
Paid-Capital in Excess of Par – Common
Cash ($30,000 x $10 per share)
Common Stock (30,000 x $6)
Paid-in Capital in Excess of Par – Common
Common stock (1,500 x $6)
Paid-in Capital in Excess of Par – Common
Problem 10-74A, Obj. 2, 4
Student Name
Course Name
Student ID:
Date:
Yoder Outdoor Furniture Company included the following stockholders’ equity on its year-end
balance sheet at February 28, 2017:
Stockholders Equity
Preferred stock, 6% cumulative—par value $35 per share;
authorized 120,000 shares in each class …………………
Class A—issued 72,000 shares ……………..…………..
$2,520,000
Class B—issued 89,000 shares…………….…………....
$3,115,000
Common stock—$6 par value:…………..…………..………
authorized 1,500,000 shares,
issued 310,000 shares………………..……………………….. 1,860,000
Additional paid-in capital—common ……………….……….
5,570,000
Retained earnings….…………..………………………………….. 8,370,000
21,435,000
Students: Please fill-in areas that are shaded in
light yellow.
Financial Accounting
Analyze stockholders’ equity and dividends of a corporation
Problem 10-74A
Instructions
1. Identify the different issues of stock that Yoder Outdoor Furniture Company has
outstanding.
2. Give the summary entries to record issuance of all the Yoder stock. Assume that all the
stock was issued for cash. Explanations are not required.
3. Suppose Yoder passed its preferred dividends for three years. Would the company have to
pay those dividends in arrears before paying dividends to the common stockholders? Give
your reason.
4. What amount of preferred dividends must Yoder declare and pay each year to avoid having
preferred dividends in arrears?
5. Assume that preferred dividends are in arrears for 2016. Journalize the declaration of an
$820,000 dividend on February 28, 2017. An explanation is not required.
Requirement 1
Requirement 2
DATE DEBIT CREDIT
Requirement 3
Enter explanation here.
Test Your Knowledge
Enter explanation here.
Journal
ACCOUNT TITLE AND EXPLANATION
Requirement 4
Computation:
Class A Preferred: Enter narrative of calculations here. FORMULA
Class B Preferred Enter narrative of calculations here. FORMULA
Total preferred dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –$
Requirement 5
DATE DEBIT CREDIT
2017
Feb. 28
ACCOUNT TITLE AND EXPLANATION
Dividends Payable, Common
Enter explanation here.
Journal
Problem 10-74A, Obj. 2, 4
Student Name
Course Name
Student ID:
Date:
Yoder Outdoor Furniture Company included the following stockholders’ equity on its year-end
balance sheet at February 28, 2017:
Stockholders Equity
Preferred stock, 6% cumulative—par value $35 per share;
authorized 120,000 shares in each class ….…..………...
Class A—issued 72,000 shares ….…..…..………..…...
$2,520,000
Class B—issued 89,000 shares……..…..…..…..…..….
$3,115,000
Common stock—$6 par value:….…..…..………..…..…....
authorized 1,500,000 shares,
issued 310,000 shares….…..…..…..…..…..…..…..………. 1,860,000
Additional paid-in capital—common …….…..…..…..….... 5,570,000
Retained earnings….…..…..…..…..…..…..…..………..…..…. 8,370,000
21,435,000
Analyze stockholders’ equity and dividends of a corporation
Financial Accounting
Students: Please fill-in areas that are shaded in
light yellow.
Problem 10-74A
Instructions
1. Identify the different issues of stock that Yoder Outdoor Furniture Company has
outstanding.
2. Give the summary entries to record issuance of all the Yoder stock. Assume that all the
stock was issued for cash. Explanations are not required.
3. Suppose Yoder passed its preferred dividends for three years. Would the company have to
pay those dividends in arrears before paying dividends to the common stockholders? Give
your reason.
4. What amount of preferred dividends must Yoder declare and pay each year to avoid having
preferred dividends in arrears?
5. Assume that preferred dividends are in arrears for 2016. Journalize the declaration of an
$820,000 dividend on February 28, 2017. An explanation is not required.
Requirement 1
Requirement 2
DATE DEBIT CREDIT
2,520,000
2,520,000
Test Your Knowledge
Yoder Outdoor Furniture Company has Class A cumulative Preferred Stock, Class B cumulative preferred
stock, and common stock outstanding
Journal
ACCOUNT TITLE AND EXPLANATION
Cash
Class A Preferred Stock
Common Stock
Class B Preferred Stock
Cash ($1,860,000 + $5,570,000)
Cash
Additional Paid-in Capital – Common
Yoder Outdoor Furniture would have to pay all preferred dividends in arrears and pay the current year’s
dividends before paying dividends to common stockholders because the preferred stock is cumulative
Requirement 4
Yoder must pay preferred dividends of $338,100 each year to avoid paying dividends in arrears.