D1. The common shares of HooverInc. are currently selling at $143per share. The directors want toreduce the share price andincrease the share volume beforemaking a new issue. The per-share carrying value is $34. Thereare currently 1 million sharesissued and outstanding.Instructionsa. Prepare the necessary journalentries assuming that:1. The board votes for a 2-for-1stock split.2. The board votes for a 100%stock dividend at the fair value ofthe shares.b. Briefly discuss the accountingand securities market differencesbetween these two methods ofincreasing the number of sharesoutstanding.

a. Prepare journal entry to record the board votes a 2-for-1 stock split. Particular debit credit…

Answered: The common shares of Hoover Inc. are…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 15EB: Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the...

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Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split? What is the total amount of equity before and after the split?
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split?
According to a company press release, on January 5, 2012, Hansen Natural Corporation changed its name to Monster Beverage Corporation. According to Yahoo Finance, on that day the value of the company stock (symbol: MNST) was $15.64 per share. On January 5, 2018, the stock closed at $63.49 per share. This represents an increase of nearly 306%. A. Discuss the factors that might influence the increase in share price. B. Consider yourself as a potential shareholder. What factors would you consider when deciding whether or not to purchase shares in Monster Beverage Corporation today?
Aggregate Mining Corporation was incorporated five years ago. It is authorized to issue 500,000 shares of $100 par value 8% cumulative preferred stock. It is also authorized to issue 750,000 shares of $6 par value common stock. It has issued 50,000 of the common shares and 1,000 of the cumulative preferred shares. The corporation has never declared a dividend and the preferred shares are one years in arrears. Aggregate Mining has the following transactions this year: Journalize these transactions. For the stock split, show the calculation for how many shares are outstanding after the split and the par value per share after the split
Effective May 1, the shareholders of Baltimore Corporation approved a 2-for-1 split of the companys common stock and an increase in authorized common shares from 100,000 shares (par value 20 per share) to 200,000 shares (par value 10 per share). Baltimores shareholders equity items immediately before issuance of the stock split shares were as follows: What should be the balances in Baltimores Additional Paid-in Capital and Retained Earnings accounts immediately after the stock split is effected?
Assume that Lily Corporation has outstanding 1,500 shares of 150 par callable preferred stock that were issued at 175 per share, and that no dividends are in arrears. If the call price is 185 per share, what journal entry will Lily make to record the recall of these shares?
Outstanding Stock Lars Corporation shows the following information in the stockholders equity section of its balance sheet: The par value of common stock is S5, and the total balance in the Common Stock account is $225,000. There are 13,000 shares of treasury stock. Required: What is the number of shares outstanding? Use the following information for Exercises 10-58 and 10-59: Stahl Company was incorporated as a new business on January 1, 2019. The company is authorized to issue 600,000 shares of $2 par value common stock and 80,000 shares of 6%, S20 par value, cumulative preferred stock. On January 1, 2019, the company issued 75,000 shares of common stock for $15 per share and 5,000 shares of preferred stock for $25 per share. Net income for the year ended December 31, 2019, was $500,000.
Comprehensive Young Corporation has been operating successfully for several years. It is authorized to issue 24,000 shares of no-par common stock and 6,000 shares of 8%, 100 par preferred stock. The Contributed Capital section of its January 1, 2019, balance sheet is as follows: Part a. A shareholder has raised the following questions: 1. What is the legal capital of the corporation? 2. At what average price per share has the preferred stock been issued? 3. How many shares of common stock have been issued (the common stock has been issued at an average price of 23 per share)? Part b. The company engaged in the following transactions in 2019: Required: 1. Answer the questions in Part a. 2. Prepare journal entries to record the transactions in Part b. 3. Prepare the Contributed Capital section of Youngs December 31, 2016, balance sheet.
The board of directors of Sizzy Company, whose USD50 par value share capital is currently trading at USD60 per share, has decided to declare a share dividend. The share dividend is not expected to have an impact on the selling price. Sizze Company, which has a total of 1,000,000 authorized shares; issued 500,000 shares, 100,000 of which are now held in treasury. Compute and determine the percentage that should be declared as a share dividend by the directors if USD2,400,000 of the retained earnings is charged?
A corporation, which had 36,700 shares of common stock outstanding, declared a 5-for-1 stock split. Question Content Area a. What will be the number of shares outstanding after the split?fill in the blank 6d98aa0e7fb202d_1 shares b. If the common stock had a market price of $190 per share before the stock split, what would be an approximate market price per share after the split?$fill in the blank 6d98aa0e7fb202d_2 per share Question Content Area c. Journalize the entry for the stock split. If no entry is required, type "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select -
Marcos Company, which had 35,000 shares of common stock outstanding, declared a 4-for-1 stock split. a. What will be the number of shares outstanding after the split? shares b. If the common stock had a market price of $280 per share before the stock split, what would be an approximate market price per share after the split?$ per share

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