Prior to conversion or redemption, the preferred shares should be classified on the balance sheet as:
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Neumann Corporation issues convertible preferred stock that is mandatorily redeemable five years from the date of issuance. During the last two years that the
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shareholders’ equity.
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debt.
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either shareholders’ equity or debt.
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treasury stock .
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- Use the same facts as in RE 16-3, but instead assume that Pickens declares and issues a 50% stock dividend when the stock is selling for 30 per share. Prepare the journal entry on the date of declaration to record Pickenss stock dividend.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.Splish Company's ledger shows the following balances on December 31, 2025. 7% Preferred stock-$10 par value, outstanding 21,200 shares Common stock-$100 par value, outstanding 32,100 shares Retained earnings Assuming that the directors decide to declare total dividends in the amount of $396,000, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock. a. The preferred stock is cumulative and fully participating. (Round the rate of participation to 6 decimal places, e.g.0.014278. Round answers to O decimal places, e.g. 38,487.) $ $ Preferred b. The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. 38,487.) $ Preferred $ Preferred Common c. The preferred stock is noncumulative and is participating in distributions in excess of a 9% dividend rate on the common stock. (Round the rate of participation to 6 decimal places, e.g.0.014278. Round…
- On January 5, 2020, Buffalo Corporation received a charter granting the right to issue 5,500 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 46,300 shares of $10 par value common stock. It then completed these transactions. Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. Record the journal entry for the transaction listed above.A company issued for $78 per share, 17 shares of $43 par value convertible preferred stock. One share of preferred stock can be converted into 4 shares of the company’s $36 par value common stock. Assume that all of the preferred stock was converted into common stock, and the market value of the common stock at the date of the conversion was $30 per share. This conversion will affect Retained Earnings by $_________. (Do NOT put plus or minus sign in front of the amount. If the conversion does not affect Retained Earnings, then enter 0).On July 1, 2020, Phoenix company offers to issue their accountant 800 common shares at their current market value of $12 per share, to equal the fair value of $9,600. The accountant accepts the offer of shares in exchange for accounting services. Record the journal entry for the issuance of shares. Select one: a. Debit Cash $9,600, Credit Common Shares $9,600 b. Debit Accounting Fees Expense $9,600, Credit Cash $9,600 c. Debit Accounting Fees Expense $9,600, Credit Common Shares $9,600 d. Debit Cash $9,600, Credit Service Revenue $9,600
- Riverbed Corporation is authorized to issue common and $3 convertible preferred shares. Each preferred share is convertible into four common shares. On July 2, the company issued 100,000 preferred shares for $110 per share. The common shares were trading at $25.70 on September 7, $27.50 on September 19, and $30.70 on September 28.Journalize the conversion of the preferred shares on September 19. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Sept. 19 (To record the conversion of shares.)On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical’s equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the…On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical's equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the stockholders' equity if all but 60,000 share rights were exercised? 1,300,000 increase 1,800,000 increase 2,100,000 increase no change What is the effect on the stockholders' equity as a results of the issuance of stock rights? 200,000 increase no change…
- On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical’s equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the…On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical’s equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the stockholders’ equity as a result of the issuance of stock rights? no change 2,500,000 increase 500,000 increase 200,000 increase What is the…On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical's equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the stockholders' equity as a result of the issuance of stock rights? 2,500,000 increase no change 500,000 increase 200,000 increase