Stockholders’ Equity Chapter 13 Exercises. Issuing Stock In-Class Exercise (Form groups and work...

Stockholders’ Equity

Chapter 13

Exercises

Issuing StockIssuing StockIssuing StockIssuing Stock

• In-Class Exercise (Form groups and work exercise):

Exercise Page E13- 22 788 Stock Issue Transactions

(Use the format, as reflected on the next slide, to complete this exercise)


Exercise Page E13- 22 788 Stock Issue Transactions


Date Description Debit Credit

General Journal


ExerciseExercise PagePage E13- 22E13- 22 788 Issuing Stock at Par and No- 788 Issuing Stock at Par and No-ParPar

ExerciseExercise PagePage E13- 22E13- 22 788 Issuing Stock at Par and No- 788 Issuing Stock at Par and No-ParPar


Exercise E13-22Exercise E13-22::

The charter of Evergreen Capital Corporation authorizes the issuance The charter of Evergreen Capital Corporation authorizes the issuance of 900 shares of preferred stock and 1,250 shares of common stock. of 900 shares of preferred stock and 1,250 shares of common stock. During a two-month period, Evergreen completed these stock During a two-month period, Evergreen completed these stock issuance transactions:issuance transactions:

Mar. 23 Issues 230 shares of $4 par value common stock for cash ofMar. 23 Issues 230 shares of $4 par value common stock for cash of $5 per share. $5 per share.

Apr. 12 Received inventory with a market value of $23,000 and Apr. 12 Received inventory with a market value of $23,000 and equipment with a market value of $20,000 for 320 shares of equipment with a market value of $20,000 for 320 shares of the $4 par value common stock. the $4 par value common stock.

17 Issued 900 shares of 5%, $20 par value preferred stock for17 Issued 900 shares of 5%, $20 par value preferred stock for $20 per share. $20 per share.

RequirementsRequirements::(1) Record the transactions in the general journal.(1) Record the transactions in the general journal.(2) Prepare the stockholders’ equity section of the Evergreen balance(2) Prepare the stockholders’ equity section of the Evergreen balance sheet as of April 30, 2014. Retained Earnings balance is $79,000. sheet as of April 30, 2014. Retained Earnings balance is $79,000.


The charter of Evergreen Capital Corporation authorizes the issuance The charter of Evergreen Capital Corporation authorizes the issuance of 900 shares of preferred stock and 1,250 shares of common stock. of 900 shares of preferred stock and 1,250 shares of common stock. During a two-month period, Evergreen completed these stock During a two-month period, Evergreen completed these stock issuance transactions:issuance transactions:

Mar. 23 Issues 230 shares of $4 par value common stock for cash ofMar. 23 Issues 230 shares of $4 par value common stock for cash of $5 per share. $5 per share.

Apr. 12 Received inventory with a market value of $23,000 and Apr. 12 Received inventory with a market value of $23,000 and equipment with a market value of $20,000 for 320 shares of equipment with a market value of $20,000 for 320 shares of the $4 par value common stock. the $4 par value common stock.

17 Issued 900 shares of 5%, $20 par value preferred stock for17 Issued 900 shares of 5%, $20 par value preferred stock for $20 per share. $20 per share.

RequirementsRequirements::(1) Record the transactions in the general journal.(1) Record the transactions in the general journal.(2) Prepare the stockholders’ equity section of the Evergreen balance(2) Prepare the stockholders’ equity section of the Evergreen balance sheet as of April 30, 2014. Retained Earnings balance is $79,000. sheet as of April 30, 2014. Retained Earnings balance is $79,000.

End of ExerciseEnd of Exercise


Cash DividendsCash DividendsCash DividendsCash Dividends

• In-Class Exercise (Form groups and work exercises):

Exercise Page E13-23 788 Dividends-Common/Preferred

(Cumulative)

• In-Class Exercise (Form groups and work exercises):

Exercise Page E13-23 788 Dividends-Common/Preferred

(Cumulative)



Northern Communications has the following stockholders’ equity:Northern Communications has the following stockholders’ equity:

Preferred Stock – 6%, $11 Par Value; 150,000 sharesPreferred Stock – 6%, $11 Par Value; 150,000 shares authorized, 20,000 shares issued and outstanding…….. $ 220,000 authorized, 20,000 shares issued and outstanding…….. $ 220,000

Common Stock -- $3 Par Value; 575,000 sharesCommon Stock -- $3 Par Value; 575,000 shares authorized, 400,000 shares issued and outstanding…… $1,200,000 authorized, 400,000 shares issued and outstanding…… $1,200,000

Retained Earnings……………………………………………... $ 190,000Retained Earnings……………………………………………... $ 190,000

RequirementsRequirements::(1) Assuming the preferred stock is (1) Assuming the preferred stock is cumulative, compute the amount, compute the amount of dividends to preferred stockholders and stockholders for 2014 of dividends to preferred stockholders and stockholders for 2014 and 2015 if total dividend are if total dividends are $12,200 in 2014 and 2015 if total dividend are if total dividends are $12,200 in 2014 and $55,000 in 2015. and $55,000 in 2015.(2) Record the journal entries for 2014, assuming that Northern (2) Record the journal entries for 2014, assuming that Northern declared the dividend on December 1 for stockholders of record declared the dividend on December 1 for stockholders of record on December 10. Northern paid the dividend on December 20. on December 10. Northern paid the dividend on December 20.(3) (3) Record the journal entries for 2015, assuming that Northern Record the journal entries for 2015, assuming that Northern declared the dividend on December 1 for stockholders of record declared the dividend on December 1 for stockholders of record on December 15. Northern paid the dividend on December 28. on December 15. Northern paid the dividend on December 28.


Northern Communications has the following stockholders’ equity:Northern Communications has the following stockholders’ equity:

Preferred Stock – 6%, $11 Par Value; 150,000 sharesPreferred Stock – 6%, $11 Par Value; 150,000 shares authorized, 20,000 shares issued and outstanding…….. $ 220,000 authorized, 20,000 shares issued and outstanding…….. $ 220,000

Common Stock -- $3 Par Value; 575,000 sharesCommon Stock -- $3 Par Value; 575,000 shares authorized, 400,000 shares issued and outstanding…… $1,200,000 authorized, 400,000 shares issued and outstanding…… $1,200,000

Retained Earnings……………………………………………... $ 190,000Retained Earnings……………………………………………... $ 190,000

RequirementsRequirements::(1) Assuming the preferred stock is (1) Assuming the preferred stock is cumulative, compute the amount, compute the amount of dividends to preferred stockholders and stockholders for 2014 of dividends to preferred stockholders and stockholders for 2014 and 2015 if total dividend are if total dividends are $12,200 in 2014 and 2015 if total dividend are if total dividends are $12,200 in 2014 and $55,000 in 2015. and $55,000 in 2015.(2) Record the journal entries for 2014, assuming that Northern (2) Record the journal entries for 2014, assuming that Northern declared the dividend on December 1 for stockholders of record declared the dividend on December 1 for stockholders of record on December 10. Northern paid the dividend on December 20. on December 10. Northern paid the dividend on December 20.(3) (3) Record the journal entries for 2015, assuming that Northern Record the journal entries for 2015, assuming that Northern declared the dividend on December 1 for stockholders of record declared the dividend on December 1 for stockholders of record on December 15. Northern paid the dividend on December 28. on December 15. Northern paid the dividend on December 28.


Preferred Dividend RequirementPreferred Dividend RequirementPreferred Dividend RequirementPreferred Dividend Requirement

NoteNote: Preferred stockholders are entitled to no more : Preferred stockholders are entitled to no more than $13,200 in any one year as follow:than $13,200 in any one year as follow: (a) $11 par value x 6% = $.66 per share (a) $11 par value x 6% = $.66 per share (b) $.66 x 20,000 shares = $13,200 (b) $.66 x 20,000 shares = $13,200

NoteNote: Preferred stockholders are entitled to no more : Preferred stockholders are entitled to no more than $13,200 in any one year as follow:than $13,200 in any one year as follow: (a) $11 par value x 6% = $.66 per share (a) $11 par value x 6% = $.66 per share (b) $.66 x 20,000 shares = $13,200 (b) $.66 x 20,000 shares = $13,200


Preferred dividends in arrearsPreferred dividends in arrears $13.200 - $12,200 = $1,000$13.200 - $12,200 = $1,000

Preferred dividends in arrearsPreferred dividends in arrears $13.200 - $12,200 = $1,000$13.200 - $12,200 = $1,000


NoteNote: Preferred stockholders are entitled to the same : Preferred stockholders are entitled to the same $13,200 dividend requirement as in year 2014$13,200 dividend requirement as in year 2014

NoteNote: Preferred stockholders are entitled to the same : Preferred stockholders are entitled to the same $13,200 dividend requirement as in year 2014$13,200 dividend requirement as in year 2014

Cash and Stock DividendsCash and Stock DividendsCash and Stock DividendsCash and Stock Dividends


Exercise Page E13-26 790 Cash and Stock Dividends


Exercise Page E13-26 790 Cash and Stock Dividends



General Journal


ExerciseExercise PagePage E13-26 790 Cash and Stock DividendsE13-26 790 Cash and Stock Dividends

ExerciseExercise PagePage E13-26 790 Cash and Stock DividendsE13-26 790 Cash and Stock Dividends


Painting Schools, Inc. is authorized to issue 200,000 shares of $1 parPainting Schools, Inc. is authorized to issue 200,000 shares of $1 par common stock. common stock.

The company issued 77,000 shares at $3 per share.The company issued 77,000 shares at $3 per share.

When the market price of common stock was $5 per share, PaintingWhen the market price of common stock was $5 per share, Painting declared and distributed a 10% stock dividend. declared and distributed a 10% stock dividend.

Later, Painting declared and paid a $0.25 per share cash dividend.Later, Painting declared and paid a $0.25 per share cash dividend.

RequirementsRequirements::

(1) Journalize the declaration and the distribution of the stock dividend.(1) Journalize the declaration and the distribution of the stock dividend.

(2) Journalize the declaration and the payment of the cash dividend.(2) Journalize the declaration and the payment of the cash dividend.


Painting Schools, Inc. is authorized to issue 200,000 shares of $1 parPainting Schools, Inc. is authorized to issue 200,000 shares of $1 par common stock. common stock.

The company issued 77,000 shares at $3 per share.The company issued 77,000 shares at $3 per share.

When the market price of common stock was $5 per share, PaintingWhen the market price of common stock was $5 per share, Painting declared and distributed a 10% stock dividend. declared and distributed a 10% stock dividend.

Later, Painting declared and paid a $0.25 per share cash dividend.Later, Painting declared and paid a $0.25 per share cash dividend.

RequirementsRequirements::

(1) Journalize the declaration and the distribution of the stock dividend.(1) Journalize the declaration and the distribution of the stock dividend.

(2) Journalize the declaration and the payment of the cash dividend.(2) Journalize the declaration and the payment of the cash dividend.



Dividend Shares ComputationDividend Shares Computation77,000 shares x 10% = 7,700 shares77,000 shares x 10% = 7,700 shares

7,700 shares x $5 = $38,5007,700 shares x $5 = $38,500

Dividend Shares ComputationDividend Shares Computation77,000 shares x 10% = 7,700 shares77,000 shares x 10% = 7,700 shares

7,700 shares x $5 = $38,5007,700 shares x $5 = $38,500


7,700 shares x $1 = $7,7007,700 shares x $1 = $7,7007,700 shares x $1 = $7,7007,700 shares x $1 = $7,700


Common


77,000 shares + 7,700 shares = 84,70077,000 shares + 7,700 shares = 84,70084,700 shares x $0.25 = $21,17584,700 shares x $0.25 = $21,175

77,000 shares + 7,700 shares = 84,70077,000 shares + 7,700 shares = 84,70084,700 shares x $0.25 = $21,17584,700 shares x $0.25 = $21,175


Exercise No. Page E13-30 792 Treasury Stock Transactions


Exercise No. Page E13-30 792 Treasury Stock Transactions


Treasury Stock TransactionsTreasury Stock TransactionsTreasury Stock TransactionsTreasury Stock Transactions


General Journal

ExerciseExercise PagePage E13-30 792 Treasury StockE13-30 792 Treasury Stock

ExerciseExercise PagePage E13-30 792 Treasury StockE13-30 792 Treasury Stock



Stock transactions for Careful Driving School, Inc. follows:Stock transactions for Careful Driving School, Inc. follows:

Mar. 4 Issued 22,000 shares of $1 par value common stock at $18 perMar. 4 Issued 22,000 shares of $1 par value common stock at $18 per share. share.

May 22 Purchased 1,400 shares of treasury stock – common at $11 perMay 22 Purchased 1,400 shares of treasury stock – common at $11 per share. share.

Sep. 22 Sold 500 shares of treasury stock – common at $24 per share.

Oct. 14 Sold 900 shares of treasury stock – common at $9 per share.

Requirement:

(1) Journalize the transactions.


Stock transactions for Careful Driving School, Inc. follows:Stock transactions for Careful Driving School, Inc. follows:

Mar. 4 Issued 22,000 shares of $1 par value common stock at $18 perMar. 4 Issued 22,000 shares of $1 par value common stock at $18 per share. share.

May 22 Purchased 1,400 shares of treasury stock – common at $11 perMay 22 Purchased 1,400 shares of treasury stock – common at $11 per share. share.

Sep. 22 Sold 500 shares of treasury stock – common at $24 per share.

Oct. 14 Sold 900 shares of treasury stock – common at $9 per share.

Requirement:

(1) Journalize the transactions.


Stockholders’ Equity Chapter 13 Exercises. Issuing Stock In-Class Exercise (Form groups and work...

Documents

Transcript of Stockholders’ Equity Chapter 13 Exercises. Issuing Stock In-Class Exercise (Form groups and work...