Treasury stock transactions | Accounting homework help
Pr. 15-143—Treasury stock transactions.
The original sale of the $50 par value common shares of Gray Company was recorded as follows:
Cash 290,000
Common Stock 250,000
Paid-in Capital in Excess of Par 40,000
Instructions
Record the treasury stock transactions (given below) under the cost method:
Transactions:
(a)Bought 300 shares of common stock as treasury shares at $62.
(b)Sold 80 shares of treasury stock at $60.
(c)Sold 40 treasury shares at $68.
Solution 15-143
DateAccount NameRefDebit Credit
a
b
c
Pr. 15-145—Equity transactions.
Foley Corporation has the following capital structure at the beginning of the year:
6% Preferred stock, $50 par value, 20,000 shares authorized,
6,000 shares issued and outstanding$ 300,000
Common stock, $10 par value, 60,000 shares authorized,
40,000 shares issued and outstanding400,000
Paid-in capital in excess of par 110,000
Total paid-in capital810,000
Retained earnings 440,000
Total stockholders’ equity$1,250,000
Instructions
(a)Record the following transactions which occurred consecutively (show all calculations).
1.A total cash dividend of $90,000 was declared and payable to stockholders of record. Record dividends payable on common and preferred stock in separate accounts.
2.A 10% common stock dividend was declared. The average market value of the common stock is $18 a share.
3.Assume that net income for the year was $150,000 (record the closing entry) and the board of directors appropriated $70,000 of retained earnings for plant expansion.
(b)Construct the stockholders’ equity section incorporating all the above information.
Solution 15-145
(a)
DateAccount NameRefDebit Credit
1
Show Computation for Transaction #22
3
Solution 15-145 (cont.)
(b)
Show computation for Retained Earnings – Unappropriated:
*Pr. 15-146—Dividends on preferred and common stock.
Rensing, Inc., has $800,000 of 8% preferred stock and $1,200,000 of common stock outstanding, each having a par value of $10 per share. No dividends have been paid or declared during 2009 and 2010. As of December 31, 2011, it is desired to distribute $488,000 in dividends.
Instructions
How much will the preferred and common stockholders receive under each of the following assumptions:
(a)The preferred is noncumulative and nonparticipating.
(b)The preferred is cumulative and nonparticipating.
(c)The preferred is cumulative and fully participating.
(d)The preferred is cumulative and participating to 12% total.
Solution 15-146
(a)PreferredCommonTotal
(b)PreferredCommonTotal
(c)PreferredCommonTotal
(d)PreferredCommonTotal
Pr. 15-147—Basic EPS.
Assume that the following data relative to Kane Company for 2010 is available:
Net Income $2,100,000
Transactions in Common Shares Change Cumulative
Jan. 1, 2010, Beginning number 700,000
Mar. 1, 2010, Purchase of treasury shares(60,000)640,000
June 1, 2010, Stock split 2-1640,0001,280,000
Nov. 1, 2010, Issuance of shares120,0001,400,000
8% Cumulative Convertible Preferred Stock
Sold at par, convertible into 200,000 shares of common (adjusted for split).$1,000,000
Instructions
(a)Compute the basic earnings per share for 2010. (Round to the nearest penny.)
Solution 15-147
Computation of weighted average shares outstanding during the year:
DateActivity DescriptionNumber of Shares
January 1Outstanding Shares
(a)Basic Earnings per share:
CAPITULO 15 INVESTMENTS
PROBLEMS
Pr. 17-114—Trading equity securities.
Gordon Company has the following securities in its portfolio of trading equity securities on December 31, 2007:
Cost Fair Value
5,000 shares of Milner Corp., Common$155,000$139,000
10,000 shares of Eddy, Common 182,000 190,000
$337,000$329,000
All of the securities had been purchased in 2007. In 2008, Gordon completed the following securities transactions:
March 1Sold 5,000 shares of Milner Corp., Common @ $31 less fees of $1,500.
April 1Bought 600 shares of Yount Stores, Common @ $45 plus fees of $550.
The Gordon Company portfolio of trading equity securities appeared as follows on December 31, 2008:
Cost Fair Value
10,000 shares of Eddy, Common$182,000$195,500
600 shares of Yount Stores, Common 27,550 25,500
$209,550$221,000
Instructions: Prepare the general journal entries for Gordon Company for:
(a)the 2007 adjusting entry. (c)the purchase of the Yount Stores’ stock.
(b)the sale of the Milner Corp. stock. (d)the 2008 adjusting entry
Solution 17-114
DateAccount NameRefDebit Credit
(a)Show Computation for Transaction (a)
(b)Account NameRefDebitCredit
Show Computation for Transaction (b)
(c)Account NameRefDebitCredit
Show Computation for Transaction (c)
(d)Account NameRefDebitCredit
Show Computation for Transaction (d)
