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Connect Financial audit Chapter 11

Q1. Rodriguez Corporation concerns 5,000 shares of its common stock because that $130,100 cash ~ above February 20. Prepare newspaper entries to record this occasion under each of the adhering to separate situations.

You are watching: Corporations may buy back their own stock for any of the following reasons except to:

The stock has a $20 par value.The stock has actually neither par nor proclaimed value.The stock has actually a $10 stated value.

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Q2. Prepare newspaper entries to record the adhering to four different issuances the stock.

A corporation approve 5,000 share of $20 par value typical stock for $120,000 cash.A corporation approve 2,500 share of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $53,000. The stock has a $2 per share declared value.A corporation authorize 2,500 share of no-par common stock to its promoters in exchange for your efforts, approximated to be worth $53,000. The stock has actually no stated value.A corporation authorize 1,250 shares of $25 par value wanted stock for $84,250 cash.

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Q3. Sudoku firm issues 32,000 share of $6 par value usual stock in exchange for land and a building. The land is valued in ~ $236,000 and also the structure at $365,000. Prepare the newspaper entry to record issuance of the share in exchange because that the land and building.

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Q4. On June 30, 2017, trickster Corporation’s typical stock is priced at $30.50 per share before any type of stock dividend or split, and the stockholders’ equity section of its balance sheet shows up as follows.

Common stock—$6 par value, 65,000 sharesauthorized, 26,000 share issued and outstanding$156,000
Paid-in funding in overfill of par value, usual stock100,000
Retained earnings256,000
Total stockholders’ equity$512,000

1. Assume the the agency declares and immediately distributes a 100% share dividend. This event is taped by capitalizing retained earnings equal to the stock’s par value. Answer these questions around stockholders’ equity as it exist after issuing the brand-new shares.a.,b.& c. complete the below table to calculate the retained earnings balance, complete stockholders’ same and variety of outstanding shares.

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2. Assume the the agency implements a 2-for-1 stock break-up instead of the stock dividend in component 1. Answer this questions around stockholders’ equity as it exists after issuing the new shares.a.,b.& c. complete the below table to calculation the retained revenue balance, full stockholders’ equity and number of outstanding shares.

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Q5. York’s exceptional stock is composed of 85,000 shares of 6.0% preferred stock with a $5 par worth and also 150,000 shares of usual stock through a $1 par value. Throughout its first four years of operation, the coporation, group declared and paid the following total cash dividends:

2015 total cash dividends$13,900
2016 total cash dividends23,500
2017 total cash dividends280,000
2018 full cash dividends430,000

Determine the lot of dividends paid annually to every of the 2 classes of stockholders: preferred and also common. Additionally compute the total dividends payment to each class for the four years combined. Assume that the desired stock is noncumulative. (Round your “Dividend per wanted Share” answers to 3 decimal places.)

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Q6. York’s impressive stock is composed of 80,000 share of 7.0% preferred stock v a $5 par value and likewise 140,000 shares of common stock v a $1 par value. Throughout its first four year of operation, the copy, group declared and paid the following complete cash dividends:

2015 full cash dividends$16,500
2016 total cash dividends26,000
2017 full cash dividends275,000
2018 full cash dividends425,000

Determine the lot of dividends paid yearly to every of the two classes of shareholder assuming that the preferred stock is cumulative. Also determine the full dividends paid to each course for the four years combined. (Round your “Dividend per wanted Share” answers come 3 decimal places.)

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Q7. Alexander coporation, group reports the following materials of stockholders’ equity on December 31, 2016:

Common stock—$25 par value, 70,000 shares authorized,46,000 shares issued and outstanding$1,150,000
Paid-in capital in overabundance of par value, typical stock92,000
Retained earnings396,000
Total stockholders’ equity$1,638,000

In year 2017, the complying with transactions influenced its stockholders’ same accounts.

Jan 2Purchased 4,600 shares of its own stock in ~ $25 cash every share.
Jan 7Directors declared a $1.50 per share cash dividend payable ~ above February 28 come the February 9 shareholder of record.
Feb 28Paid the dividend declared on January 7.
July 9Sold 1,840 the its treasury share at $30 cash per share.
Aug 27Sold 2,300 that its treasury shares at $20 cash every share.
Sept 9Directors asserted a $2 per share cash dividend payable top top October 22 to the September 23 shareholder of record.
Oct 22Paid the dividend declared on September 9.
Dec 31Closed the $68,000 credit balance (from net income) in the Income an introduction account to preserved Earnings.

Required:1. Prepare newspaper entries to document each of this transactions for 2017.

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2. Prepare a statement of retained revenue for the year ended December 31, 2017.

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3. Prepare the stockholders’ equity section of the that company balance sheet together of December 31, 2017.

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Connect Financial bookkeeping Chapter 11 Quiz

Q1. A company issued 60 shares of $100 par value typical stock for $7,000 cash. The journal entry to document the issuance is:

Debit Cash $7,000; credit typical Stock $7,000.Debit investment in typical Stock $7,000; credit transaction Cash $7,000.Debit Cash $7,000; credit common Stock $6,000; credit transaction Paid-in capital in overabundance of Par Value, common Stock $1,000.Debit common Stock $6,000, debit invest in typical Stock $1,000; credit transaction Cash $7,000.Debit Cash $7,000; credit transaction Paid-in resources in overabundance of Par Value, typical Stock $6,000, credit common Stock $1,000.

Q2. Corporations might buy earlier their very own stock for any kind of of the following reasons other than to:

Avoid a enemy take-over.Have shares obtainable for a closing or acquisition.Have shares accessible for employee compensation.Maintain industry value for the agency stock.Allow monitoring to assume the poll rights.

Q3. A corporation offered 14,000 share of that is $1 par value usual stock in ~ a cash price of $13 every share. The entry to document this transaction would certainly include:

A debit to Paid-in funding in overabundance of Par Value, common Stock because that $182,000.A debit come Cash because that $14,000.A credit transaction to usual Stock for $182,000.A credit to typical Stock because that $14,000.A credit to Paid-in funding in overabundance of Par Value, typical Stock because that $196,000.

Q4. The complying with data were reported by a corporation:

Authorized shares20,000
Issued shares15,000
Treasury shares3,000
12,00015,00017,00020,00023,000

Q5. Sweet Company’s superior stock consists of 1,000 shares of cumulative 5% desired stock through a $100 par value and also 10,000 shares of usual stock v a $10 par value. Throughout the first three year of operation, the copy, group declared and paid the following total cash dividends.

Dividend Declared
year 1$2,000
year 2$6,000
year 3$32,000
$7,000 preferred; $25,000 common.$5,000 preferred; $27,000 common.$15,000 preferred; $17,000 common.$32,000 preferred; $0 common.$0 preferred; $32,000 common.

Q6. Prior to June 30, a agency has never ever had any treasury stock transactions. A company repurchased 100 share of its usual stock ~ above June 30 for $40 every share. ~ above July 20, it reissued 50 of these shares at $46 every share. On respectable 1, the reissued 20 that the shares at $38 per share. What is the balance in the Treasury share account on respectable 2?

$5,050$2,600$100$1,200$0

Q7. West agency declared a $0.50 per share cash dividend. The company has 190,000 shares issued, and also 10,000 share in treasury stock. The journal entry to document the dividend declaration is:

Debit Retained income $90,000; credit usual Dividends Payable $90,000.Debit typical Dividends Payable $95,000; credit transaction Cash $95,000.Debit Retained income $5,000; credit typical Dividends Payable $5,000.Debit usual Dividends Payable $90,000; credit transaction Cash $90,000.Debit Retained revenue $95,000; credit typical Dividends Payable $95,000.

Q8. Top top September 1, Ziegler Corporation had 50,000 share of $5 par value typical stock, and $1,500,000 of preserved earnings. On the date, as soon as the market price the the stock is $15 every share, the corporation worries a 2-for-1 share split. The basic journal entry to document this transaction is:

Debit Retained income $750,000; credit usual Stock split Distributable $750,000.Debit Retained income $750,000; credit usual Stock $750,000.Debit Retained earnings $250,000; credit typical Stock $250,000.Debit Retained income $250,000; credit transaction Stock split Payable $250,000.No entry is produced this transaction.

Q9. Percy corporation was formed on January 1. The corporate charter authorized 100,000 share of $10 par value common stock. Throughout the very first month of operation, the corporation approve 400 share to the attorneys in payment the a $5,000 fee for drawing up the write-ups of incorporation. The entry to record this transaction would include:

A debit to Organization expenses for $4,000.A debit to Organization prices for $5,000.A credit to common Stock for $5,000.A credit transaction to Paid-in capital in excess of Par Value, usual Stock because that $5,000.A debit come Paid-in capital in overfill of Par Value, common Stock because that $2,000.

Q10. A firm issued 70 share of $30 par value wanted stock for $4,000 cash. The journal entry to record the issuance is:

Debit Cash $2,100; credit wanted Stock $2,100.Debit invest in wanted Stock $2,100; credit Cash $2,100.Debit Cash $4,000; credit preferred Stock $4,000.Debit wanted Stock $2,100, debit investment in desired Stock $1,900; credit Cash $4,000.

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Debit Cash $4,000; credit Paid-in resources in excess of Par Value, preferred Stock $1,900, credit desired Stock $2,100.