Horngren's Accounting, The Financial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (11th Edition)
11th Edition
ISBN: 9780134078960
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 15, Problem 2QC
Which of the following investments is most likely classified as a held-to-maturity debt investment?
Learning Objective 1
- 80% stock ownership in a subsidiary
- 100% ownership in voting stock of a supplier
- 10-year bonds
- None of the above
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(Learning Objective 2: Describe the effect of a stock issuance on paid-in capital)Saltwell Industries received $11,500,000 for the issuance of its stock on May 14. The par valueof the Saltwell stock was only $11,500. Was the excess amount of $11,488,500 a profit to Saltwell? If not, what was it?Suppose the par value of the Saltwell stock had been $2 per share, $4 per share, or $7 pershare. Would a change in the par value of the company’s stock affect Saltwell’s total paid-incapital? Give the reason for your answer.
(Learning Objective 6: Report stockholders’ equity) Doorman Corp. has thefollowing stockholders’ equity information:Doorman’s charter authorizes the company to issue 9,000 shares of 8% preferred stockwith par value of $120 and 700,000 shares of no-par common stock. The company issued 1,800shares of the preferred stock at $120 per share. It issued 140,000 shares of the common stockfor a total of $513,000. The company’s retained earnings balance at the beginning of 2018 was$77,000, and net income for the year was $94,000. During 2018, Doorman declared the specified dividend on preferred and a $0.20 per-share dividend on common. Preferred dividends for2017 were in arrears.Requirement1. Prepare the stockholders’ equity section of Doorman Corp.’s balance sheet at December 31,2018. Show the computation of all amounts. Journal entries are not required.
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.
Chapter 15 Solutions
Horngren's Accounting, The Financial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (11th Edition)
Ch. 15 - Prob. 1QCCh. 15 - Which of the following investments is most likely...Ch. 15 - Prob. 3QCCh. 15 - A company invested $45,000 in Yale Co. stock. The...Ch. 15 - Prob. 5QCCh. 15 - Prob. 6QCCh. 15 - Prob. 7QCCh. 15 - Prob. 8QCCh. 15 - Prob. 9QCCh. 15 - Prob. 10QC
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Prob. 3RQCh. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQCh. 15 - Prob. 11RQCh. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - Prob. 14RQCh. 15 - Prob. S15.1SECh. 15 - Prob. S15.2SECh. 15 - Prob. S15.3SECh. 15 - Prob. S15.4SECh. 15 - Prob. S15.5SECh. 15 - Prob. S15.6SECh. 15 - Prob. S15.7SECh. 15 - Prob. E15.8ECh. 15 - Prob. E15.9ECh. 15 - Prob. E15.10ECh. 15 - Prob. E15.11ECh. 15 - Prob. E15.12ECh. 15 - Prob. E15.13ECh. 15 - Prob. E15.14ECh. 15 - Prob. E15.15ECh. 15 - Prob. E15.16ECh. 15 - Prob. E15.17ECh. 15 - Prob. P15.18APGACh. 15 - Prob. P15.19APGACh. 15 - Prob. P15.20APGACh. 15 - Prob. P15.21BPGBCh. 15 - Prob. P15.22BPGBCh. 15 - Prob. 23CPCh. 15 - Prob. 15.1DCCh. 15 - Prob. 15.1EICh. 15 - Prob. 15.1FCCh. 15 - Financial Statement Case 151 Details about a...
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- Assessing Financial Statement Effects of Equity Method SecuritiesUse the financial statement effects template to record the following transactions involving investments in marketable securities accounted for using the equity method.a. Purchased 12,000 common shares of Bakersfield Co. at $10 per share; the shares represent 30% ownership in Bakersfield.b. Received a cash dividend of $1.50 per common share from Bakersfield.c. Bakersfield reported annual net income of $75,000.d. Sold all 12,000 common shares of Bakersfield for $128,500.Use negative signs with answers, if appropriate.  Balance Sheet  Income Statement   Noncash  Contrib.  Earned  Transaction Cash Asset + Assets = Liabilities + Captial + Capital  Revenues - Expenses = Net income a. Purchased shares of Bakersfield. Answer  Answer  Answer  Answer  Answer  Answer  Answer  Answer b. Received cash dividend from Bakersfield. Answer  Answer  Answer  Answer  Answer  Answer  Answer  Answer c.…arrow_forwardWhich of the following investments is most likely classified as a held-to-maturity investment? 80% stock ownership in a subsidiary 100% ownership in the voting stock of a supplier 10-year bonds None of the abovearrow_forward(Learning Objectives 2, 6: Account for stock issuance; report stockholders’equity) The partners who own Jefferson Rafts Co. wished to avoid the unlimited personalliability of the partnership form of business, so they incorporated as Jefferson Rafts, Inc. Thecharter from the state of Vermont authorizes the corporation to issue 200,000 shares of $15 parcommon stock. In its first month, Jefferson Rafts, Inc., completed the following transactions:Jan 6 Issued 900 shares of common stock to the promoter forassistance with issuance of the common stock. The promotionalfee was $27,000. Debit Organization Expense.9 Issued 4,000 shares of common stock to Lindsey Crow and 14,000shares to Jackie Jefferson in return for cash equal to the stock’s marketvalue of $20 per share. The two women were partners in Jefferson Rafts Co.26 Issued 1,600 shares of common stock for $25 cash per share.Requirements1. Record the transactions in the journal.2. Prepare the stockholders’ equity section of the Jefferson…arrow_forward
- Use the following information on a company’s investments in equity securities to answer questions 1- 2 below. The company’s accounting year ends December 31.   Investment Date of acquisition Cost Fair value 12/31/16 Date sold Selling price Ajax Company stock 6/20/16 $40,000 $35,000 2/10/17 $32,000 Bril Corporation stock 5/1/16  20,000 N/A 11/15/16  26,000 Coy Company stock 8/2/16  16,000  16,500 1/17/17  23,000 1. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2016 income statement?             2. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2017 income statement?arrow_forwardWhich of the following investments is most likely classified as a held-to-maturity investment? a. 80% stock ownership in a subsidiary b. 100% ownership in voting stock of a supplier c. 10-year bonds d. None of the abovearrow_forwardChapter 15 Quiz Hide or show questions               Question Content Area A partial listing of accounts and ending balances for Carver, Inc., on December 31, 2020, is shown below: Investments in long-term notes receivable $40,000 Bonds payable 300,000 Temporary investment in equity securities available for sale 120,000 Premium on bonds payable 26,000 Common stock 180,000 Subscriptions receivable: common stock 120,000 Additional paid-in capital from preferred stock conversion 24,000 Retained earnings 650,000 Preferred stock 300,000 Long-term investment in equity securities available for sale 150,000 Additional paid-in capital on common stock 910,000 Common stock subscribed 20,000 Goodwill 46,000 Donated capital 35,000 Preferred stock subscribed 50,000 Additional paid-in capital on preferred stock 45,000 Following is additional information relative to the above accounts: The preferred stock is 8% cumulative with par value of…arrow_forward
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