Homework Help is Here – Start Your Trial Now!
Business
Accounting
Gammon's state charter authorized it to issue 2 million shares of $1 par value common stock and 50,000 shares of 4 percent, $20 par value cumulative and convertible preferred stock. Gammon engaged in a number of transactions involving stock and dividends during 2020. These transactions were as follows: 1/02 Issued 200,000 shares of common stock for $250,000. Issued 6,000 shares of common stock for accounting and legal services. The bills for these services totaled $7,200. Issued 240,000 shares of common stock to Tom Lee in exchange for a building and land appraised at $200,000 and $50,000, respectively. Purchased 40,000 shares of common stock for the treasury at $1.25 per share from a person who changed her mind about investing in the company. Issued 50,000 shares of preferred stock for $1,000,000. Sold 20,000 of the shares in the treasury for $1.50 per share. Fisher's board of directors declared dividends of $49,820 payable on January 15, 2021, to stockholders of record on January 7. Dividends included preferred stock dividends of $20,000 for one-half year. For the period ended December 31, 2020, Gammon reported net income of $80,000 and earnings per common share of $0.14. At December 31, the market price per common share was $1.60. Required 1. Record Gammon's stock transactions in T accounts. 2. Prepare the stockholders' equity section of Gammon's balance sheet as of December 31, 2020. 3. Calculate Gammon's dividends yield on common stock, price/earnings ratio of common stock, and return on equity.

Gammon's state charter authorized it to issue 2 million shares of $1 par value common stock and 50,000 shares of 4 percent, $20 par value cumulative and convertible preferred stock. Gammon engaged in a number of transactions involving stock and dividends during 2020. These transactions were as follows: 1/02 Issued 200,000 shares of common stock for $250,000. Issued 6,000 shares of common stock for accounting and legal services. The bills for these services totaled $7,200. Issued 240,000 shares of common stock to Tom Lee in exchange for a building and land appraised at $200,000 and $50,000, respectively. Purchased 40,000 shares of common stock for the treasury at $1.25 per share from a person who changed her mind about investing in the company. Issued 50,000 shares of preferred stock for $1,000,000. Sold 20,000 of the shares in the treasury for $1.50 per share. Fisher's board of directors declared dividends of $49,820 payable on January 15, 2021, to stockholders of record on January 7. Dividends included preferred stock dividends of $20,000 for one-half year. For the period ended December 31, 2020, Gammon reported net income of $80,000 and earnings per common share of $0.14. At December 31, the market price per common share was $1.60. Required 1. Record Gammon's stock transactions in T accounts. 2. Prepare the stockholders' equity section of Gammon's balance sheet as of December 31, 2020. 3. Calculate Gammon's dividends yield on common stock, price/earnings ratio of common stock, and return on equity.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 10MC
See similar textbooks
icon
Related questions
Question
11:52 .l LTE Закрыть equity.docx Gammon's state charter authorized it to issue 2 million shares of $1 par value common stock and 50,000 shares of 4 percent, $20 par value cumulative and convertible preferred stock. Gammon engaged in a number of transactions involving stock and dividends during 2020. These transactions were as follows: 1/02 Issued 200,000 shares of common stock for $250,000. Issued 6,000 shares of common stock for accounting and legal services. The bills for these services totaled $7,200. Issued 240,000 shares of common stock to Tom Lee in exchange for a building and land appraised at $200,000 and $50,000, respectively. Purchased 40,000 shares of common stock for the treasury at $1.25 per share from a person who changed her mind about investing in the company. Issued 50,000 shares of preferred stock for $1,000,000. Sold 20,000 of the shares in the treasury for $1.50 per share. Fisher's board of directors declared dividends of $49,820 payable on January 15, 2021, to stockholders of record on January 7. Dividends included preferred stock dividends of $20,000 for one-half year. For the period ended December 31, 2020, Gammon reported net income of $80,000 and earnings per common share of $0.14. At December 31, the market price per common share was $1.60. Required 1. Record Gammon's stock transactions in T accounts. 2. Prepare the stockholders' equity section of Gammon's balance sheet as of December 31, 2020. 3. Calculate Gammon’s dividends yield on common stock, price/earnings ratio of common stock, and return on equity.
Transcribed Image Text:11:52 .l LTE Закрыть equity.docx Gammon's state charter authorized it to issue 2 million shares of $1 par value common stock and 50,000 shares of 4 percent, $20 par value cumulative and convertible preferred stock. Gammon engaged in a number of transactions involving stock and dividends during 2020. These transactions were as follows: 1/02 Issued 200,000 shares of common stock for $250,000. Issued 6,000 shares of common stock for accounting and legal services. The bills for these services totaled $7,200. Issued 240,000 shares of common stock to Tom Lee in exchange for a building and land appraised at $200,000 and $50,000, respectively. Purchased 40,000 shares of common stock for the treasury at $1.25 per share from a person who changed her mind about investing in the company. Issued 50,000 shares of preferred stock for $1,000,000. Sold 20,000 of the shares in the treasury for $1.50 per share. Fisher's board of directors declared dividends of $49,820 payable on January 15, 2021, to stockholders of record on January 7. Dividends included preferred stock dividends of $20,000 for one-half year. For the period ended December 31, 2020, Gammon reported net income of $80,000 and earnings per common share of $0.14. At December 31, the market price per common share was $1.60. Required 1. Record Gammon's stock transactions in T accounts. 2. Prepare the stockholders' equity section of Gammon's balance sheet as of December 31, 2020. 3. Calculate Gammon’s dividends yield on common stock, price/earnings ratio of common stock, and return on equity.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 6 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Earning per share and Dilutive securities
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
SEE MORE TEXTBOOKS