INTERMEDIATE ACCOUNTING(LL) W/CENGAGENO
2nd Edition
ISBN: 9781305617001
Author: WAHLEN
Publisher: CENGAGE L
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Chapter 15, Problem 11E
1.
To determine
Prepare a
2 (a)
To determine
Prepare a journal entry to record the conversion of preferred stock into 7 shares of common stock, $10 par.
2 (b)
To determine
Prepare a journal entry to record the conversion of preferred stock into 12 shares of common stock, $10 par.
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On January 3, 2018, Maris Corporation issued 4,000 shares of $50 par convertible preferred stock at $90 per share. Each share is convertible into four shares of $10 par common stock.
Required:
a.
Prepare the journal entry to record the issuance of the stock on January 3, 2018.
b.
On March 5, 2020, each share of preferred was converted. Prepare the journal entry to record this conversion.
c.
Assume that instead of the above circumstances regarding conversion, the company agrees to convert each share of preferred into ten shares of $10 par common stock on March 5, 2020. Prepare the journal entry to record this conversion.
Template Company provided the following concerning marketable equity securities held as "trading."
1. The entity carried the following securities on December 31, 2022:
2. On June 30, 2023, the entity sold all the B ordinary shares for P140,000.
3. On December 31, 2023, the securities are quoted as follows:
A ordinary - 4,000 shares
B ordinary - 1,000 shares
C preference - 2,000 shares
A ordinary - 4,000 shares
C preference -2,000 shares
Requirement: Complete the table below. Write zero (0) if it is not applicable.
Statement of Financial Position
Investments - FVPL
Statement of Changes in Equity
Retained earnings
Statement of Income
Unrealized gain/(loss)
Realized gain/(loss)
Acquisition Date
[a]
[d]
[9]
0]
Cost
330,000
200,000
300,000
830,000
Market
P80 per share
P180 per share
December 31, 2022
300,000
160,000
310,000
770,000
[b]
[e]
[h]
[k]
December 31, 2023
[c]
[U]
0
[0]
Convertible Preferred Stock, Convertible Bonds, and EPS
Francis Company has 16,800 shares of common stock outstanding at the beginning of 2019. Francis issued 2,100 additional shares on May 1 and 1,400 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are:
1. Convertible preferred stock: 1,750 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2016, for $55 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has bee
converted.
2. Convertible bonds: Bonds with a face value of $175,000 and an interest rate of 6.0% were issued at par in 2018. Each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted.
Francis earned net income of $72,500 during 2019. The income tax rate is 30%.
Required:
1. Compute the number of shares of common stock that Francis should use in…
Chapter 15 Solutions
INTERMEDIATE ACCOUNTING(LL) W/CENGAGENO
Ch. 15 - Prob. 1GICh. 15 - Prob. 2GICh. 15 - What are the three components and the basic...Ch. 15 - List the various rights of a shareholder. Which do...Ch. 15 - What is the meaning of the following terms: (a)...Ch. 15 - Prob. 6GICh. 15 - Prob. 7GICh. 15 - How does preferred stock differ from common stock?Ch. 15 - What amount of the proceeds from the issuance of...Ch. 15 - Prob. 10GI
Ch. 15 - Prob. 11GICh. 15 - Prob. 12GICh. 15 - Prob. 13GICh. 15 - Prob. 14GICh. 15 - Prob. 15GICh. 15 - Prob. 16GICh. 15 - Prob. 17GICh. 15 - Prob. 18GICh. 15 - Prob. 19GICh. 15 - How is a preferred stock similar to a long-term...Ch. 15 - Prob. 21GICh. 15 - Prob. 22GICh. 15 - Prob. 23GICh. 15 - Prob. 24GICh. 15 - Prob. 25GICh. 15 - What additional disclosures about preferred and...Ch. 15 - Prob. 1MCCh. 15 - Prob. 2MCCh. 15 - What is the most likely effect of a stock split on...Ch. 15 - Prob. 4MCCh. 15 - Prob. 5MCCh. 15 - Prob. 6MCCh. 15 - Prob. 7MCCh. 15 - When treasury stock is purchased for cash at more...Ch. 15 - Preferred stock that may be retired by the...Ch. 15 - When treasury stock accounted for by the cost...Ch. 15 - Brown Corporation issues 800 shares of its 5 par...Ch. 15 - Heart Corporation entered into a subscription...Ch. 15 - Blue Corporation issues 200 packages of securities...Ch. 15 - Sun Corporation issues 500 shares of 8 par common...Ch. 15 - Next Level Morgan Corporation issues 500 packages...Ch. 15 - Prob. 6RECh. 15 - Prob. 7RECh. 15 - Prob. 8RECh. 15 - Prob. 9RECh. 15 - Assume Cole Corporation originally issued 300...Ch. 15 - Violet Corporation issues 1,200 shares of 150 par...Ch. 15 - Assume that Lily Corporation has outstanding 1,500...Ch. 15 - Tulip Corporation uses the cost method to account...Ch. 15 - Par Value and No-Par Stock Issuance Caswell...Ch. 15 - Combined Sale of Stock Maxville Company issues 300...Ch. 15 - Sale of Stock with Bonds Pilsen Company issues 12%...Ch. 15 - Issuance of Stock for Land Putt Company issues 500...Ch. 15 - Prob. 5ECh. 15 - Prob. 6ECh. 15 - Prob. 7ECh. 15 - Prob. 8ECh. 15 - Prob. 9ECh. 15 - Prob. 10ECh. 15 - Prob. 11ECh. 15 - Prob. 12ECh. 15 - Stock Rights with Preferred Stock Nelson...Ch. 15 - Various Journal Entries Lodi Company is authorized...Ch. 15 - Treasury Stock, Cost Method On January 1, Lorain...Ch. 15 - Prob. 16ECh. 15 - Treasury Stock, Cost Method (and IFRS Revaluation)...Ch. 15 - Treasury Stock, Cost and Par Value Methods On...Ch. 15 - Treasury Stock, No Par Propst-Steele Production...Ch. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - Prob. 5PCh. 15 - Prob. 6PCh. 15 - Issuances of Stock Cada Corporation is authorized...Ch. 15 - Issuances of Stock Epple Corporation is authorized...Ch. 15 - Prob. 9PCh. 15 - Comprehensive The shareholders equity section of...Ch. 15 - Prob. 11PCh. 15 - Comprehensive Byrd Companys Contributed Capital...Ch. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Reconstruct Journal Entries At the end of its...Ch. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 1CCh. 15 - Prob. 2CCh. 15 - Prob. 3CCh. 15 - Capital Stock Capital stock is an important area...Ch. 15 - Treasury Stock A corporation sometimes engages in...Ch. 15 - Prob. 6CCh. 15 - Prob. 7CCh. 15 - Compensatory Share Option Plan Tom Twitlet,...Ch. 15 - Prob. 9CCh. 15 - Treasury Stock For numerous reasons, a corporation...Ch. 15 - Prob. 11CCh. 15 - Prob. 12CCh. 15 - Prob. 13CCh. 15 - Prob. 14C
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