Financial Accounting (5th Edition) (What's New in Accounting)
5th Edition
ISBN: 9780134727790
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 48AP
Analyzing stockholders’ equity (Learning Objectives 2. 3. 4, & 7) 20-25 min.
Gamma Corporation was organized in 2017. At December 31, 2017, Gamma Corporation’s
| Stockholders’ Equity | |
| Paid-in Capital: | |
| none issued | $0 |
| Common Stock, $2 par, 110,000 shares authorized, | |
| 11,000 shares issued and outstanding | 22,000 |
| Paid-in Capital in Excess of Par—Common | 68,750 |
| Total Paid-in Capital | $90,750 |
| Retained Earnings | 73,000 |
| Total Stockholders’ Equity | $163,750 |
Requirement
Answer the following questions and make
- 1. What does the 4 percent mean for the preferred stock? After Gamma Corporation issues preferred stock, how much in annual cash dividends would it expect to pay on 8,000 shares?
- 2. At what average price per share did Gamma Corporation issue the common stock during 2017?
- 3. Were first-year operations profitable? Give your reason.
- 4. During 2018, the company completed the following selected transactions. Journalize each transaction. Explanations are not required.
- a. Issued for cash 1,000 shares of preferred stock at par value
- b. Issued for cash 2,200 shares of common stock at a price of $9.50 per share
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Learning Objective 6: Report stockholders’ equity) Lima Corp. has the followingstockholders’ equity information:Lima’s charter authorizes the company to issue 4,000 shares of 11% preferred stock withpar value of $200 and 700,000 shares of no-par common stock. The company issued 1,000shares of the preferred stock at $200 per share. It issued 350,000 shares of the common stockfor a total of $512,000. The company’s retained earnings balance at the beginning of 2018 was$75,000, and net income for the year was $100,000. During 2018, Lima declared the specifieddividend on preferred and a $0.10 per-share dividend on common. Preferred dividends for 2017were in arrears.Requirement1. Prepare the stockholders’ equity section of Lima Corp.’s balance sheet at December 31,2018. Show the computation of all amounts. Journal entries are not required.
Matchlessly, Inc., was organized in 2017. At December 31, 2017, the company’sBalance sheet reported the following stockholders’ equity:Matchlessly, Inc.Stockholders’ EquityDecember 31,2017Paid-in CapitalPreferred stock, 7%, $40 par, 200,000 shares authorized, none issued $ 0Common stock, $1 par, 600,000 shares authorized, 61,000 shares issuedand outstanding61,000Paid-in capital in excess of par—common 41,000Total paid-in capital 102,000Retained earnings 29,000Total Stockholders’ equity $131,000Note: Total paid in capital = 61,000 + 41,000Total stockholders’ equity = 102,000 + 29,000Requirements:1. During 2018, the company completed the following selected transactions and you arerequired to journalize each transaction. Explanations are NOT required.a. Issued for cash 1,300 shares of preferred stock at par value.b. Issued for cash 2,400 shares of common stock at a price of $5 per share.c. Net Loss for the year was $79,000, and the company declared no dividends.Make the closing entry for…
Journalize transactions, post,
and prepare a stockholders'
equity section; calculate
ratios.
P11-2B The stockholders' equity accounts of Warden Corporation on January 1, 2014,
were as follows.
Preferred Stock (9%, $50 par cumulative, 10,000 shares authorized)
Common Stock ($1 stated value, 2,000,000 shares authorized)
Paid-in Capital in Excess of Par Value-Preferred Stock
Paid-in Capital in Excess of Stated Value-Common Stock
Retained Earnings
Treasury Stock (8,000 common shares)
$ 200,000
1,000,000
16,000
1,400,000
1,716,000
20,000
(LO 2, 3, 5, 7, 8), AP
GLS
During 2014 the corporation had these transactions and events pertaining to its stock-
holders' equity.
Feb.
Issued 20,000 shares of common stock for $160,000.
Purchased 4,000 shares of common stock for the treasury at a cost of
$16,000.
Declared a 9% cash dividend on preferred stock, payable December 15.
Declared a $0.30 per share cash dividend to common stockholders of
record on December 15, payable December 31, 2014.
Nov. 10…
Chapter 10 Solutions
Financial Accounting (5th Edition) (What's New in Accounting)
Ch. 10 - What are the four baste rights of stockholders?Ch. 10 - Assume you are a CFO of a company that is...Ch. 10 - Prob. 3DQCh. 10 - What accounts, if any, are involved in the journal...Ch. 10 - With which type of stock would dividends in...Ch. 10 - What accounts are affected by the declaration and...Ch. 10 - What are some of the reasons for issuing a stock...Ch. 10 - Prob. 8DQCh. 10 - What could you reasonably conclude if a company...Ch. 10 - Prob. 10DQ
Ch. 10 - Prob. 1SCCh. 10 - Prob. 2SCCh. 10 - Prob. 3SCCh. 10 - Prob. 4SCCh. 10 - Prob. 5SCCh. 10 - Prob. 6SCCh. 10 - Prob. 7SCCh. 10 - Prob. 8SCCh. 10 - Prob. 9SCCh. 10 - Prob. 10SCCh. 10 - Prob. 11SCCh. 10 - Prob. 12SCCh. 10 - Stockholders' equity terminology (Learning...Ch. 10 - Stock issuance (Learning Objective 3) 5-10 min....Ch. 10 - Issuance of stock for cash and noncash assets...Ch. 10 - Prob. 4SECh. 10 - Prob. 5SECh. 10 - Prob. 6SECh. 10 - Prob. 7SECh. 10 - Accounting for cash dividends (Learning Objective...Ch. 10 - Prob. 9SECh. 10 - Prob. 10SECh. 10 - Prob. 11SECh. 10 - Prob. 12SECh. 10 - Prob. 13SECh. 10 - Prob. 14SECh. 10 - Prob. 15AECh. 10 - Issuing stock (Learning Objectives 3 7) 10-15 min....Ch. 10 - Prob. 17AECh. 10 - Prob. 18AECh. 10 - Prob. 19AECh. 10 - Accounting for cash dividends (Learning Objective...Ch. 10 - Prob. 21AECh. 10 - Accounting for cash and stock dividends (Learning...Ch. 10 - Prob. 23AECh. 10 - Prob. 24AECh. 10 - Prob. 25AECh. 10 - Accounting for treasury stock (Learning Objectives...Ch. 10 - Prob. 27AECh. 10 - Prob. 28AECh. 10 - Prob. 29AECh. 10 - Calculating return on equity (Learning Objective...Ch. 10 - Prob. 31BECh. 10 - Prob. 32BECh. 10 - Prob. 33BECh. 10 - Prob. 34BECh. 10 - Prob. 35BECh. 10 - Prob. 36BECh. 10 - Accounting for stock dividends (Learning...Ch. 10 - Accounting for cash and stock dividends (Learning...Ch. 10 - Prob. 39BECh. 10 - Prob. 40BECh. 10 - Accounting for treasury stock (Learning Objectives...Ch. 10 - Prob. 42BECh. 10 - Disclosing stockholders equity on a balance sheet...Ch. 10 - Accounting for various stockholders' equity...Ch. 10 - Prob. 45BECh. 10 - Prob. 46BECh. 10 - Prob. 47APCh. 10 - Analyzing stockholders equity (Learning Objectives...Ch. 10 - Analyzing stockholders equity (Learning Objectives...Ch. 10 - Accounting for cash dividends (Learning Objective...Ch. 10 - Accounting for various stockholders equity...Ch. 10 - Prob. 52APCh. 10 - Prob. 53APCh. 10 - Prob. 54BPCh. 10 - Prob. 55BPCh. 10 - Analyzing stockholders equity (Learning Objectives...Ch. 10 - Accounting for cash dividends (Learning Objective...Ch. 10 - Prob. 58BPCh. 10 - Prob. 59BPCh. 10 - Prob. 60BPCh. 10 - Prob. 1CECh. 10 - Continuing Problem This problem continues our...Ch. 10 - Prob. 1EIACh. 10 - Case 2. The board of directors for Atlantic...Ch. 10 - Financial Analysis Purpose: To help familiarize...Ch. 10 - Prob. 1IACh. 10 - Prob. 1SBACh. 10 - Written Communication You just got off the...
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