Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
25 Minutes, Medium
a.
Stockholders' equity
shares authorized, issued, and outstanding 500,000$
Retained earnings at Dec. 31, 2016 170,000$
Add: Net income for 2017 and 2018 890,000
Net income for four-year period 1,060,000$
b.
1.
PROBLEM 11.3A
MANHATTAN TRANSPORT COMPANY
December 31, 2018
Partial Balance Sheet
MANHATTAN TRANSPORT COMPANY
A corporation might decide to use cumulative preferred stock rather than debt to finance
operations for any of the following reasons (only 2 required):
Although cumulative dividends must eventually be paid if the corporation is profitable, they
8% cumulative preferred stock, $100 par, 5,000
*Computation of retained earnings at December 31, 2018:
35 Minutes, Medium
Jan 6 Cash 280,000
Common Stock 40,000
240,000
12 250,000
250,000
Dec 20 25,000
Cash 25,000
31
Retained Earnings 147,200
147,200
year.
10% Cumulative Preferred Stock
Income Summary
To record payment of dividend declared Nov. 15.
Dividends Payable
To close the Income Summary account for the
20__
Issued 20,000 shares of $2 par value common stock
Additional Paid-in Capital: Common Stock
at $14 per share.
PROBLEM 11.4A
a.
General Journal
SHARNES COMMUNICATIONS, INC.
Issued 2,500 shares of $100 par value, 10%,
cumulative preferred stock at par value.
Cash
b.
Stockholders' equity
50,000 shares, issued and outstanding 2,500 shares 250,000$
issued and outstanding 35,500 shares 71,000
441,000
10% cumulative preferred stock, $100 par, authorized
PROBLEM 11.4A
SHARNES COMMUNICATIONS, INC.
December 31, 20xx
Partial Balance Sheet
SHARNES COMMUNICATIONS, INC. (concluded)
Common stock, $2 par, authorized 400,000 shares,
Additional paid-in capital: Common stock
35 Minutes, Strong
a. Par value of all preferred stock outstanding 2,400,000$
100$
24,000
d. 900,000$
Paid-in capital in excess of par: Common 8,325,000
Total issuance price of all common stock 9,225,000$
Number of shares of common stock issued (c) 450,000
20.50$
h. Retained earnings, beginning of the year 717,500$
Add: Net income for the year 3,970,000
Subtotal 4,687,500$
Less: Retained earnings, end of the year 2,595,000
Total dividends paid during the year 2,092,500$
Average issuance price per share of common ($9,225,000 ÷ 450,000 shares)
Par value of all common stock issued
PROBLEM 11.5A
FT. SMITH PRODUCTS
Par value per share of preferred stock
Number of shares of preferred stock outstanding ($2,400,000 ÷ $100)
35 Minutes, Medium
In Thousands
(Except for Per
Share Amounts)
a. Par value of all common stock outstanding 6,819$
Par value per share 0.50
Number of shares outstanding ($6,819/$0.50) 13,638
PROBLEM 11.6A
PARSONS, INC. CORPORATION
e.
f.
g.
PROBLEM 11.6A
PARSONS, INC. (concluded)
The basic advantage of being publicly owned is that the corporation has the opportunity to
raise large amounts of equity capital from many investors. Some publicly owned
The term convertible means that at the option of the preferred stockholder, each preferred
At $248 per share, Parson's preferred has a dividend yield of 6.9% ($17.20 ÷ $248). In
15 Minutes, Easy
a.
b.
The company’s par value—one-tenth of a cent per share—is quite low. However, the
corporation can set par value at any level that it chooses; the amount of par value has
PROBLEM 11.7A
TECHNO CORPORATION
Par value is the legal capital per share—the amount by which stockholders’ equity cannot
be reduced except by losses. Thus, par value may be viewed as a minimum cushion of
equity capital existing for the protection of creditors.
15 Minutes, Medium
Stockholders’ equity:
Common stock, $1 par, 50,000 shares authorized, issued, and 50,000$
outstanding
Additional paid-in capital: Common stock 350,000
c.
The treasury stock purchase of $35,000 in 2017 was reported as a financing cash outflow
PROBLEM 11.8A
a. Feller Corporation
31-Dec-18
Partial Balance Sheet
FELLER CORPORATION
30 Minutes, Strong
Stockholders’ equity:
10% preferred stock, $100 par, cumulative, authorized,
issued, and outstanding 30,000 shares 3,000,000$
Total stockholders’ equity at Dec. 31, 2018 6,695,000$
*Computation of additional paid-in capital on treasury stock:
Purchase price per share: $400,000 ÷ 20,000 shares = $20
per share
c.
Had the company decided to split its common stock 3-for-1 on December 31, 2018, the market value
PROBLEM 11.9A
a.
HERNDON INDUSTRIES
20 Minutes, Easy
a.
Stockholders' equity
authorized 2,000 shares, issued and out- 50,000$
standing 500 shares
Issued and outstanding 80,000 shares 80,000
b.
c.
10% cumulative preferred stock, $100 par value,
SOLUTIONS TO PROBLEMS SET B
PROBLEM 11.1B
SEARFOSS, INC.
December 31, 2018
Partial Balance Sheet
SEARFOSS, INC.
The market price of preferred stock usually decreases as interest rates increase. At
Common stock, $1 par value, authorized 300,000 shares
There are no dividends in arrears at December 31, 2018. We know this because common
20 Minutes, Easy
a.
Stockholders' equity
authorized, issued, and outstanding 10,000 shares 1,000,000$
b.
Note to financial statements:
Common stock, $1 par value, authorized 1 million shares,
PROBLEM 11.2B
BANNER PUBLICATIONS
December 31, 2018
Partial Balance Sheet
BANNER PUBLICATIONS
10% cumulative preferred stock, $100 par value,
25 Minutes, Medium
a.
Stockholders' equity
Retained earnings at Dec. 31, 2016 530,000$
Add: Net income for 2017 and 2018 1,400,000
b.
1.
A corporation might decide to use cumulative preferred stock rather than debt to finance
operations for any of the following reasons (only 2 required):
Although cumulative dividends must eventually be paid if the corporation is profitable, they
10% cumulative preferred stock, $100 par value, 10,000
*Computation of retained earnings at December 31, 2018:
PROBLEM 11.3B
RAY BEAM, INC.
December 31, 2018
Partial Balance Sheet
RAY BEAM, INC.
35 Minutes, Medium
Jan 7 Cash 300,000
18 400,000
400,000
Nov 25 20,000
20,000
Dec 11 20,000
Cash 20,000
20__
per share on 4,000 preferred shares outstanding.
Cash
To record payment of dividend declared Nov. 25.
Dividends Payable
5% Cumulative Preferred Stock
Payable Dec. 11.
To record declaration of annual dividends of $5
Dividends (Preferred Stock)
Dividends Payable
Issued 4,000 shares of $100 par value, 5%,
cumulative preferred stock at par value.
PROBLEM 11.4B
a.
General Journal
MARKUP, INC.
