j. On 30 September, Howard declared a semi-annual cash dividend on common shares of $0.10 per share and the yearly dividend onpreferred shares, both payable on 30 October 20X5, to shareholders of record on 10 October 20X5. (Record the dividend declarationand payment.)k. On 31 December, holders of fractional rights exercised those rights, resulting in the issuance of 1,850 shares. ThePage 1024remaining rights expired.1. Earnings for 20X5 were $25 million.Required:Prepare journal entries to record the listed transactions. Round per-share amounts to two decimal places. A14-25 Transactions, Comprehensive:Howard Corp. is a publicly owned company whose shares are traded on the TSX. At 31 December 20X4, Howard had unlimited sharesof no-par value common shares authorized, of which 15,000,000 shares were issued. The shareholders' equity accounts at 31 December20X4 had the following balances:Common shares (15,000,000 shares) $230,000,000Retained earnings50,000,000During 20X5, Howard had the following transactions:a. On 1 February, a distribution of 2,000,000 common shares was completed. The shares were sold for $18 per share.b. On 15 February, Howard issued, at $110 per share, 100,000 of no-par value, $8, cumulative preferred shares.c. On 1 March, Howard reacquired and retired 20,000 common shares for $14.50 per share.d. On 15 March, Howard reacquired and retired 10,000 common shares for $20 per share.e. On 31 March, Howard declared a semi-annual cash dividend on common shares of $0.10 per share, payable on 30 April 20X5, toshareholders of record on 10 April 20X5. (Record the dividend declaration and payment.) The preferred share dividend will be paidon schedule in October.f. On 15 April, 18,000 common shares were acquired for $17.50 per share and held as treasury stock.g. On 30 April, 12,500 of the treasury shares were resold for $19.25 per share.h. On 31 May, when the market price of the common was $23 per share, Howard declared a 5% stock dividend distributable on 1 July20X5, to common shareholders of record on 1 June 20X5. Treasury shares were not given the stock dividend. The stock dividend wasrecorded at market value only on distribution. The dividend resulted in fractional share rights issued, that, when exercised, wouldresult in the issuance of 2,300 common shares.i. On 6 July, Howard issued 300,000 common shares. The selling price was $25 per share.

Journal Entry The purpose of preparing the journal entry which kept the recording of the transaction…

preferred shares, both payable on 30 October 20X5, to shareholders of record on 10 October 20X5. (Record the dividend declaration and payment.) k. On 31 December, holders of fractional rights exercised those rights, resulting in the issuance of 1,850 shares. The Page 1024 remaining rights expired. 1. Earnings for 20X5 were $25 million. Required: repare journal entries to record the listed transactions. Round per-share amounts to two decimal places.

preferred shares, both payable on 30 October 20X5, to shareholders of record on 10 October 20X5. (Record the dividend declaration and payment.) k. On 31 December, holders of fractional rights exercised those rights, resulting in the issuance of 1,850 shares. The Page 1024 remaining rights expired. 1. Earnings for 20X5 were $25 million. Required: repare journal entries to record the listed transactions. Round per-share amounts to two decimal places.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter8: Liabilities And Stockholders' Equity

Section: Chapter Questions

Problem 8.24E

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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.
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