Due Week 8 and worth 70 points
Directions:
Answer the following questions on a separate Microsoft Word or Excel document.
Explain how you reached the answer or show your work if a mathematical
calculation is needed, or both. Submit your assignment using the assignment
link in Blackboard.
Exercises
E11-7.Quay
Co. had the following transactions during the current period.
Mar. 2 Issued 5,000 shares of $5 par value
common stock to attorneys in payment of a bill for $30,000 for services
performed in helping the company to incorporate.
June
12 Issued 60,000 shares of $5
par value common stock for cash of $375,000.
July
11 Issued 1,000 shares of
$100 par value preferred stock for cash at $110 per share.
Nov.
28 Purchased 2,000 shares of
treasury stock for $80,000.
Instructions
Journalize
the transactions.
E11-13.On
January 1, Guillen Corporation had 95,000 shares of no-par common stock issued
and outstanding. The stock has a stated value of $5 per share. During the year,
the following occurred.
Apr.
1 Issued 25,000 additional
shares of common stock for $17 per share.
June
15 Declared a cash dividend of
$1 per share to stockholders of record on June 30.
July
10 Paid the $1 cash dividend.
Dec.
1 Issued 2,000 additional
shares of common stock for $19 per share.
15 Declared a cash dividend on
outstanding shares of $1.20 per share to stockholders of record on December 31.
Instructions
a)
Prepare
the entries, if any, on each of the three dividend dates.
b)
How
are dividends and dividends payable reported in the financial statements
prepared at December 31?
E12-8.Presented
below are two independent situations.
1.
Gambino
Cosmetics acquired 10% of the 200,000 shares of common stock of Nevins Fashion
at a total cost of $13 per share on March 18, 2015. On June 30, Nevins declared
and paid a $60,000 dividend. On December 31, Nevins reported net income of
$122,000 for the year. At December 31, the market price of Nevins Fashion was
$15 per share. The stock is classified as available-for-sale.
2.
Kanza,
Inc., obtained significant influence over Rogan Corporation by buying 40% of
Rogan’s 30,000 outstanding shares of common stock at a total cost of $9 per
share on January 1, 2015. On June 15, Rogan declared and paid a cash dividend
of $30,000. On December 31, Rogan reported a net income of $80,000 for the
year.
Instructions
Prepare
all the necessary journal entries for 2015 for (a) Gambino Cosmetics and (b)
Kanza, Inc.
E12-12.Uttinger Company has the following data at December 31,
2015.
The
available-for-sale securities are held as a long-term investment.
Instructions
a)
Prepare
the adjusting entries to report each class of securities at fair value.
b)
Indicate
the statement presentation of each class of securities and the related
unrealized gain (loss) accounts.
Problems
P11-3A.The stockholders’ equity accounts of Castle Corporation on
January 1, 2015, were as follows.
Preferred
Stock (8%, $50 par, cumulative, 10,000 shares authorized) $
400,000
Common
Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000
Paid-in
Capital in Excess of Par—Preferred Stock 100,000
Paid-in
Capital in Excess of Stated Value—Common Stock 1,450,000
Retained
Earnings 1,816,000
Treasury
Stock (10,000 common shares) 50,000
During
2015, the corporation had the following transactions and events pertaining to
its stockholders’ equity.
Feb.
1 Issued 25,000 shares of
common stock for $120,000.
Apr.
14 Sold 6,000
shares of treasury stock—common for $33,000.
Sept.
3 Issued 5,000
shares of common stock for a patent valued at $35,000.
Nov.
10 Purchased 1,000 shares of
common stock for the treasury at a cost of $6,000.
Dec.
31 Determined that net income
for the year was $452,000.
No
dividends were declared during the year.
Instructions
a)
Journalize
the transactions and the closing entry for net income.
b)
Enter
the beginning balances in the accounts, and post the journal entries to the
stockholders’ equity accounts. (Use J5 for the posting reference.)
c)
Prepare
a stockholders’ equity section at December 31, 2015, including the disclosure
of the preferred dividends in arrears.
P12-6A.The following data, presented in alphabetical order, are
taken from the records of Nieto Corporation.
The investment in Sasse common stock is considered to be a
long-term available-for-sale security.
Instructions
Prepare
a classified balance sheet at December 31, 2015.
