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Corporate Financial Accounting

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter12: Corporations: Organization, Stock Transactions, And Dividends

Section: Chapter Questions

Problem 12.5BE

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ABC Co. was organized on January 1, 2019, with an authorization of 1.200.000 ordinary shares with a par value of Rp6 per share. During 2019, the corporation had the capital transactions as provided below. ABC Co. used the cost method to record the purchase and reissuance of the treasury shares. What is the total amount of share premium as of December 31, 2019?

January 5
July 28
December 31
issued 675.000 shares @ Rp10 per share
purchased 90.000 shares @ Rp11 per share
sold the 90.000 shares held in treasury @ Rp18 per share

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Entries for selected corporate transactions Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises stockholders equity accounts, with balances on January 1, 20Y6, are as follows: Common Stock, 20 stated value (500,000 shares authorized, 375,000 shares issued) 7,500,000 Paid-In Capital in Excess of Stated ValueCommon Stock 825,000 Retained Earnings 33,600,000 Treasury Stock (25,000 shares, at cost 450,000 The following selected transactions occurred during the year: Jan. 22. Paid cash dividends of 0.08 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for 28,000. Apr. 10. Issued 75,000 shares of common stock for 24 per share. June 6. Sold all of the treasury stock for 26 per share. July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is 25 per share. Aug. 15. Issued shares of stock for the stock dividend declared on July 5. Nov. 23. Purchased 30,000 shares of treasury stock for 19 per share. Dec. 28. Declared a 0.10-per-share dividend on common stock. 31. Closed the credit balance of the income summary account, 1,125,000. 31. Closed the two dividends accounts to Retained Earnings. Instructions 1. Enter the January 1 balances in T accounts for the stockholders equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends. 2. Journalize the entries to record the transactions, and post to the eight selected accounts. 3. Prepare a retained earnings statement for the year ended December 31, 20Y6. 4. Prepare the Stockholders Equity section of the December 31, 20Y6, balance sheet.
Entries for stock dividends Alpine Energy Corporation has 1,500,000 shares of 40 par common stock outstanding. On August 2, Alpine Energy declared a 4% stock dividend to be issued October 8 to stockholders of record on September 15. The market price of the stock was 70 per share on August 2. Journalize the entries required on August 2, September 15, and October 8.

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