# acct 212 chapter 13 homework 1

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acct 212 Â  homework 1 chapter 13

Exercise 13-2 Accounting for par, stated, and no-par stock issuances
L.O. P1

 Aloha Corporation issues 16,000 shares of its common stock for \$222,000 cash on February 20.
 1 Assume the stock has neither par nor stated value. Prepare journal entries to record this event. (Omit the “\$” sign in your response.)

 2 Assume the stock has a \$11 par value. Prepare journal entries to record this event. (Omit the “\$” sign in your response.)

3.

Assume
the stock has an \$5.5 stated value. Prepare journal entries to record this
response.)

Q2

Exercise 13-3 Recording stock issuances L.O. P1

[The following information applies to
the questions displayed below.]

 Prepare journal entries to record the following four separate issuances of stock. (Omit the “\$” sign in your response.)

 Section Break Exercise 13-3 Recording stock issuances L.O. P1

2.

award:
1 out of
1.00 point

Exercise 13-3 Part 1

 1 A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth \$37,000. The stock has no stated value.

rev: 09_21_2012

 Worksheet Exercise 13-3 Part 1

3.

award:
1 out of
1.00 point

Exercise 13-3 Part 2

 2 A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth \$37,000. The stock has a \$1 per share stated value.

rev: 09_21_2012

 Worksheet Exercise 13-3 Part 2

4.

award:
1 out of
1.00 point

Exercise 13-3 Part 3

 3 A corporation issued 10,000 shares of \$20 par value common stock for \$240,000 cash.

rev: 09_21_2012

 Worksheet Exercise 13-3 Part 3

5.

award:
1 out of
1.00 point

Exercise 13-3 Part 4

4.

A corporation issued 2,500 shares of \$50 par
value preferred stock for \$162,000 cash.

6.

award:
1 out of
1.00 point

Exercise 13-4 Stock issuance for noncash assets L.O. P1

 Soku Company issues 19,000 shares of \$10 par value common stock in exchange for land and a building. The land is valued at \$231,000 and the building at \$373,000.
 Prepare the journal entry to record issuance of the stock in exchange for the land and building. (Omit the “\$” sign in your response.)

 Worksheet Difficulty: Easy Exercise 13-4 Stock issuance for noncash assets L.O. P1 Learning Objective: 13-P1 Record the issuance of corporate stock.

7

.

award:
1.34 out of
2.00 points

Exercise 13-6 Stock dividends and splits L.O. P2

 On June 30, 2011, Quinn Corporationâ€™s common stock is priced at \$25.5 per share before any stock dividend or split, and the stockholdersâ€™ equity section of its balance sheet appears as follows.
 Common stockâ€”\$6 par value, 75,000 shares authorized, 30,000 shares issued and outstanding \$ 180,000 Paid-in capital in excess of par value, common stock 100,000 Retained earnings 280,000 Total stockholdersâ€™ equity \$ 560,000
 Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained earnings equal to the stockâ€™s par value. Answer these questions about stockholdersâ€™ equity as it exists after issuing the new shares.

 1c. How many shares are outstanding?

 Assume that the company implements a 2-for-1 stock split instead of the stock dividend in part 1. Answer these questions about stockholdersâ€™ equity as it exists after issuing the new shares.

 2c. How many shares are outstanding?

 Worksheet Difficulty: Medium Exercise 13-6 Stock dividends and splits L.O. P2 Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

Exercise 13-7 Stock dividends and per share book values L.O. P2

[The following information applies to
the questions displayed below.]

 The stockholdersâ€™ equity of Whiz.com Company at the beginning of the day on February 5 follows.
 Common stockâ€”\$5 par value, 150,000 shares authorized, 83,000 shares issued and outstanding \$ 415,000 Paid-in capital in excess of par value, common stock 525,000 Retained earnings 675,000 Total stockholdersâ€™ equity \$ 1,615,000

 On February 5, the directors declare a 12% stock dividend distributable on February 28 to the February 15 stockholders of record. The stockâ€™s market value is \$39 per share on February 5 before the stock dividend. The stockâ€™s market value is \$35 per share on February 28.

 Section Break Exercise 13-7 Stock dividends and per share book values L.O. P2

8.

award:
1.20 out of
2.00 points

Exercise 13-7 Part 1

 1 Prepare entries to record both the dividend declaration and its distribution. (Omit the “\$” sign in your response.)

 Worksheet Difficulty: Medium Exercise 13-7 Part 1 Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

9.

award:
0.25 out of
1.00 point

Exercise 13-7 Part 2

 2 One stockholder owned 950 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholderâ€™s shares immediately before and after the stock dividend of February 5. (Do not round intermediate calculations. Round book value per share to 2 decimal places and other answers to the nearest dollar amount. Omit the “\$” sign in your response.)

 Worksheet Difficulty: Medium Exercise 13-7 Part 2 Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

10.

award:
1 out of
1.00 point

Exercise 13-7 Part 3

 3 Compute the total market value of the investorâ€™s shares in part 2 as of February 5 and February 28.(Omit the “\$” sign in your response.)

 Worksheet Difficulty: Medium Exercise 13-7 Part 3 Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

11.

award:
2 out of
2.00 points

Exercise 13-8 Dividends on common and noncumulative preferred stock L.O.
C2

 Wadeâ€™s outstanding stock consists of 13,000 shares of noncumulative 7.30% preferred stock with a \$10 par value and also 32,500 shares of common stock with a \$1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

 Determine the amount of dividends paid each year to each of the two classes of stockholders. (Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.)

 Compute the total dividends paid to each class for the four years combined. (Omit the “\$” sign in your response.)

 Worksheet Difficulty: Medium Exercise 13-8 Dividends on common and noncumulative preferred stock L.O. C2 Learning Objective: 13-C2 Explain characteristics of, and distribute dividends between, common and preferred stock.

2.

award:
1.60 out of
2.00 points

Exercise 13-9 Dividends on common and cumulative preferred stock L.O. C2

 Wadeâ€™s outstanding stock consists of 53,000 shares of cumulative 9.50% preferred stock with a \$10 par value and also 132,500 shares of common stock with a \$1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

 Determine the amount of dividends paid each year to each of the two classes of stockholders. (Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.)

 Determine the total dividends paid to each class for the four years combined. (Omit the “\$” sign in your response.)

13.

award:
1.67 out of
2.00 points

Exercise 13-11 Preparing a statement of retained earnings L.O. C3

 The following information is available for Ballard Company for the year ended December 31, 2011.
 a. Balance of retained earnings, December 31, 2010, prior to discovery of error, \$870,000. b. Cash dividends declared and paid during 2011, \$13,000. c. It neglected to record 2009 depreciation expense of \$42,600, which is net of \$6,400 in income taxes. d. The company earned \$220,000 in 2011 net income.
 Prepare a 2011 statement of retained earnings for Ballard Company. (Amounts to be deducted should be indicated with a minus sign. Omit the “\$” sign in your response.)

14.

award:
1 out of
1.00 point

Exercise 13-12 Earnings per share L.O. A1

 Guess Company reports \$1,375,000 of net income for 2011 and declares \$192,500 of cash dividends on its preferred stock for 2011. At the end of 2011, the company had 320,000 weighted-average shares of common stock.

 1 What amount of net income is available to common stockholders for 2011? (Omit the “\$” sign in your response.)

15.

award:
1 out of
1.00 point

Exercise 13-13 Earnings per share L.O. A1

 Franklin Company reports \$2,000,000 of net income for 2011 and declares \$280,000 of cash dividends on its preferred stock for 2011. At the end of 2011, the company had 290,000 weighted-average shares of common stock.

 1 What amount of net income is available to common stockholders for 2011? (Omit the “\$” sign in your response.)

 Worksheet Difficulty: Medium Exercise 13-13 Earnings per share L.O. A1

16.

award:
2 out of
2.00 points

Exercise 13-14 Dividend yield computation and interpretation L.O. A3

 Which companyâ€™s stock would probably not be classified as an income stock?

Company 4

 Worksheet Difficulty: Medium Exercise 13-14 Dividend yield computation and interpretation L.O. A3 Learning Objective: 13-A3 Compute dividend yield and explain its use in analysis.

17.

award:
1.20 out of
2.00 points

Exercise 13-15 Price-earnings ratio computation and interpretation L.O.
A2

 Compute the price-earnings ratio for each of these four separate companies. (Round your answers to 1 decimal place.)

 Which stock might an analyst likely investigate as being potentially undervalued by the market?

Company 4

 Worksheet

8.

award:
1 out of
2.00 points

Exercise 13-16 Book value per share L.O. A4

 The equity section of Webster Corporationâ€™s balance sheet shows the following.
 Preferred stockâ€”5% cumulative, \$20 par value, \$25 call price, 10,000 shares issued and outstanding \$ 200,000 Common stockâ€”\$10 par value, 35,000 shares issued and outstanding 350,000 Retained earnings 267,500 Total stockholdersâ€™ equity \$ 817,500
 Determine the book value per share of the preferred and common stock under two separate situations.(Round your answers to 2 decimal places. Omit the “\$” sign in your response.)

 1 No preferred dividends are in arrears.

 2 Three years of preferred dividends are in arrears.

19.

award:
2 out of
2.00 points

Exercise 13-17 Accounting for equity under IFRS L.O. C3, P1

 Unilever Group reports the following equity information for the years ended December 31, 2007 and 2008 (euros in millions).
 December 31 2008 2007 Share capital â‚¬ 499 â‚¬ 499 Share premium 136 168 Other reserves (6,455 ) (3,414 ) Retained profit 15,826 15,169 Shareholdersâ€™ equity â‚¬ 10,006 â‚¬ 12,422
 1 Match each of the three account titles share capital, share premium, and retained profit with the usual account title applied under U.S. GAAP.
 a. Share capital Common stock, par value b. Share premium Paid-in capital in excess of par value, common stock c. Retained profit Retained earnings
 2 Prepare Unileverâ€™s journal entry, using its account titles, to record the issuance of capital stock assuming that its entire par value stock was issued on December 31, 2007, for cash. (Enter answers in millions of euros and not in whole euros. Omit the “â‚¬” sign in your response.)
 General journal Debit Credit Cash 667 Share capital Share premium
 3 What were Unileverâ€™s 2008 dividends assuming that only dividends and income impacted retained profit for 2008 and that its 2008 income totaled â‚¬2,676? (Enter answers in millions of euros and not in whole euros. Omit the “â‚¬” sign in your response.)
 Dividends â‚¬ 2,019

 Worksheet Difficulty: Medium Learning Objective: 13-P1 Record the issuance of corporate stock. Exercise 13-17 Accounting for equity under IFRS L.O. C3, P1 Learning Objective: 13-C3 Explain the items reported in retained earnings.

20.

award:
1.29 out of
4.00 points

Exercise 13-18 Cash dividends, treasury stock, and statement of retained
earnings L.O. C3, P2, P3

 Kroll Corporation reports the following components of stockholdersâ€™ equity on December 31, 2011.
 Common stockâ€”\$27 par value, 52,000 shares authorized, 42,000 shares issued and outstanding \$ 1,134,000 Paid-in capital in excess of par value, common stock 51,000 Retained earnings 268,000 Total stockholdersâ€™ equity \$ 1,453,000
 In year 2012, the following transactions affected its stockholdersâ€™ equity accounts.
 Jan. 2 Purchased 3,600 shares of its own stock at \$27 cash per share. Jan. 7 Directors declared a \$1 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record. Feb. 28 Paid the dividend declared on January 7. July 9 Sold 400 of its treasury shares at \$32 cash per share. Aug. 27 Sold 3,200 of its treasury shares at \$25 cash per share. Sept. 9 Directors declared a \$1 per share cash dividend payable on October 22 to the September 23 stockholders of record. Oct. 22 Paid the dividend declared on September 9. Dec. 31 Closed the \$8,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
 Required: 1. Prepare journal entries to record each of these transactions for 2012. (Omit the “\$” sign in your response.)

 2 Prepare a statement of retained earnings for the year ended December 31, 2012. (Amounts to be deducted should be indicated with a minus sign. Omit the “\$” sign in your response.)

/

 3 Prepare the stockholdersâ€™ equity section of the companyâ€™s balance sheet as of December 31, 2012.(Omit the “\$” sign in your response.)

rev: 02_21_2012