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Multiple-Choice Questions on Reported Balances [AICPA Adapted]
Select the correct answer for each of the following questions.
2. On January 1, 20X1, Portland Corporation issued 10,000 shares of common stock in exchangefor all of Stockton Corporation’s outstanding stock. Condensed balance sheets of Portlandand Stockton immediately before the combination follow:
Portland’s common stock had a market price of $60 per share on January 1, 20X1. The marketprice of Stockton’s stock was not readily determinable. The fair value of Stockton’s net identifiable assets was determined to be $570,000. Portland’s investmentin Stockton’s stock will bestated in Portland’s balance sheet immediately after the combination in the amount of
a. $350,000.
b. $500,000.
c. $570,000.
d. $600,000.
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ADVANCED FINAN.ACCT.(LOOSELEAF)>CUSTOM<
- Issuances of Stock Cada Corporation is authorized to issue 10,000 shares of 100 par, convertible, callable preferred stock and 80,000 shares of no-par, no-stated value common stock. There are currently 7,000 shares of preferred and 30,000 shares of common stock outstanding. The following are several alternative transactions: 1. Purchased land by issuing 640 shares of preferred stock and 1,000 shares of common stock. Preferred and common are currently selling at 113 and 36 per share, respectively, No reliable appraisal of the land is available. 2. Same as Transaction 1, except that land is appraised at 104,000, and the preferred stock has no current market value. 3. Issued, for 99,000 cash, a combination of 400 shares of preferred stock and bonds payable with a face value of 50,000. Currently, the preferred stock is selling for 120 per share and the bonds at 104. 4. Same as Transaction 3, except that the bonds do not have a current market value. 5. Same as Transaction 3, except that the preferred stock does not have a current market value. 6. Preferred shareholders (who had originally paid the corporation 110 per share for their stock) convert 6,500 preferred shares into 19,500 shares of common stock. The current market prices of the preferred stock and the common stock are 120 and 41 per share, respectively. 7. The corporation calls the 7,000 shares of preferred stock (originally issued at 110 per share) at 123 per share. Common stock is currently selling for 42 per share. Shareholders elect not to convert into common stock. 8. Same as Transaction 7, except that shareholders owning 2,000 shares of preferred stock elect to convert each share into 3 shares of common stock The remaining 5,000 preferred shares are retired. Required: Next Level Prepare the journal entry necessary to record each transaction. Below each entry, explain your reason for the values used.arrow_forwardPlease give solutions and explanation to the three questions. The correct answer is already given, just provide me with solution. "The following are found in the trial balance of M Corporation at December 31, 2021: Authorized ordinary share, P50 par value P3,000,000; Subscription receivable P200,000; Unissued ordinary share P1,000,000; Subscribed ordinary share P500,000; Share premium ordinary P100,000. What is the total number of shares issued?" Answer: 40,000 shares The shareholders’ equity section of the statement of financial position of LW Corporation showed the following balances at December 31, 2020: Ordinary share capital, 10,000 shares issued P300,000 Share premium 100,000 Retained earnings 240,000 Treasury shares, 1,000 shares…arrow_forwardTrans Union Corporation issued 5,200 shares for $50 per share in the current year, and it issued 10,200 shares for $37 per share in the following year. The year after that, the company reacquired 20,200 shares of its own stock for $45 per share. Determine the impact (increase, decrease, or no change) of each of these transactions on the following classifications:arrow_forward
- Newly formed S&J Iron Corporation has 121,000 shares of $6 par common stock authorized. On March 1, Year 1, S&J Iron issued 9,000 shares of the stock for $11 per share. On May 2, the company issued an additional 16,500 shares for $20 per share. S&J Iron was not affected by other events during Year 1. question: b. Determine the amount S&J Iron would report for common stock on the December 31, Year 1, balance sheet.c. Determine the amount S&J Iron would report for paid-in capital in excess of par.d. What is the total amount of capital contributed by the owners?e. What amount of total assets would S&J Iron report on the December 31, Year 1, balance sheet?arrow_forwardPart COn October 1, 2021, Nicklaus Corporation receives permission to replace its $1 par value common stock (5,000,000 shares authorized, 3,000,000 shares issued, and 2,800,000 shares outstanding) with a new common stock issue having a $0.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $0.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2021, the Nicklaus Corporation declares a $0.14 per share cash dividend on common stock and a $0.31 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2021, to shareholders of record on November 15, 2021. On December 2, 2021, the Nicklaus Corporation declares a 2% stock dividend payable on December 28, 2021, to shareholders of record on December 14. At the date of declaration, the common stock…arrow_forwardAn entity was organized at the beginning of current year with 100,000 authorized shares of P100 par value. During the current year, the following transactions occurred:January 1 Sold 30,000 shares at P150 per shareFebruary 1 Issued 2,000 shares for legal services with fair value of P250,000. The shares on this date are quoted at P140 per share.March 1 Purchased 5,000 treasury shares at a cost of P120 per share.October 1 Issued P5,000,000 convertible bonds at 120. The bonds are quoted at 98 without the conversion feature.November 15 Declared a 2 for 1 share split when the market value of the share was P160.December 15 Sold 20,000 shares at P75 per share.December 31 The net income for the year was P2,000,0000. 1. Prepare the journal entries.2. Prepare the lead schedule 3. Prepare the stockholders equity sectionarrow_forward
- On September 12, 2,600 shares of Aspen Company are acquired at a price of $48.00 per share plus a $130 brokerage commission. On October 15, a $1.00-per-share dividend was received on the Aspen Company stock. On November 10, 1,040.00 shares of the Aspen Company stock were sold for $43 per share less a $52 brokerage commission. When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method. Sept. 12 Investments-Aspen Company Stock fill in the blank 2 Cash fill in the blank 4 Oct. 15 Cash fill in the blank 6 fill in the blank 8 Nov. 10 fill in the blank 10 fill in the blank 11 fill in the blank 13 fill in the blank 14arrow_forwardSelected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows: Journalize the transactions. If no entry is required, select "No Entry Required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. Jan. 8. Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 150,000 common shares outstanding. Jan. 8 fill in the blank 2d61f7fb906a068_2 fill in the blank 2d61f7fb906a068_4 Apr. 30. Declared semiannual dividends of $0.75 on 18,000 shares of preferred stock and $0.28 on the common stock payable on July 1. Apr. 30 fill in the blank 548987ff1fcff99_2 fill in the blank 548987ff1fcff99_4 July 1. Paid the cash dividends. July 1 fill in the blank c6a023f9cffef8f_2 fill in the blank c6a023f9cffef8f_4 Oct. 31. Declared semiannual…arrow_forwardplease answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image) On January 23, 15,000 shares of Aurora Company’s common stock are acquired at a price of $25 per share plus a $140 brokerage commission. On April 12, a $0.35-per-share dividend was received on the Aurora Company stock. On June 10, 5,200 shares of the Aurora Company stock were sold for $31 per share less a $115 brokerage commission. At the end of the accounting period on December 31, the fair value of the remaining 9,800 shares of Aurora Company’s stock was $30 per share. Aurora Company has 190,000 shares of common stock outstanding. Required: Journalize the entries for the original purchase, dividend, sale, and change in fair value under the fair value method. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for…arrow_forward
- On September 12, 3,800 shares of Aspen Company are acquired at a price of $60.00 per share plus a $190 brokerage commission. On October 15, a $1.00-per-share dividend was received on the Aspen Company stock. On November 10, 1,520.00 shares of the Aspen Company stock were sold for $54 per share less a $76 brokerage commission. When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method.arrow_forwardBramble Corp. issues 670 shares of $2 par value common stock and 280 shares of $100 par value preferred stock for a lump sum of $121,900. (a) Partially correct answer iconYour answer is partially correct. Prepare the journal entry for the issuance when the market price of the common shares is $130 each and market price of the preferred is $160 eacharrow_forwardNewly formed S&J Iron Corporation has 121,000 shares of $6 par common stock authorized. On March 1, Year 1, S&J Iron issued 9,000 shares of the stock for $11 per share. On May 2, the company issued an additional 16,500 shares for $20 per share. S&J Iron was not affected by other events during Year 1. question: Prepare journal entries to record the March 1 and May 2 transactionsarrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning