Exercise 12-12 Allocating dividends between common and cumulative preferred shares L05The outstanding share capital of Sheng Inc. includes 43,000 shares of $9.60 cumulative preferred and 78,000common shares, all issued during the first year of operations. During its first four years of operations, thecorporation declared and paid the following amounts in dividends:Year2021202220232024Total Dividends Declared$-0-440,0001,058,000440,000Determine the total dividends paid in each year to each class of shareholders. Also determine the total dividends paid to each class over the four years.Exercise 12-13 Allocating dividends between common and non-cumulative preferredshares LO5Determine the total dividends paid in each year to each class of shareholders of Exercise 12-12 under thassumption that the preferred shares are non-cumulative. Also determine the total dividends paid to eacclass over the four years.

Cumulative Preferred Stock is one of the type of preference shares in which it is mandatory for a…

Answered: Exercise 12-12 Allocating dividends…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings

Section: Chapter Questions

Problem 3SEB: COMMON AND PREFERRED CASH DIVIDENDS Ramirez Company currently has 100,000 shares of 1 par common...

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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.
STOCK DIVIDENDS Kaufman Company currently has 200,000 shares of 1 par common stock outstanding. On March 15, a 10% stock dividend was declared to shareholders of record on April 2, distributable on April 14. Market value of the common stock was estimated at 5 per share. 1. Prepare journal entries for the declaration and distribution of the 10% common stock dividend. 2. Assume Kaufman Company declared a stock dividend of 30% rather than 10%. Prepare journal entries for the declaration and distribution of the 30% common stock dividend.
Problem 10-86A Stock Dividends and Stock Splits Lance Products balance sheet includes total assets of $587,000 and the following equity account balances at December 31, 2019: Lances common stock is selling for $12 per share on December 31, 2019. Required: How much would Lance Products have reported for total assets and retained earnings on December 31, 2019, if the firm had declared and paid a $15,000 cash dividend on December 31, 2019? Prepare the journal entry for this cash dividend. How much would Lance have reported for total assets and retained earnings on December 31, 2019, if the firm had issued a 15% stock dividend on December 31, 2019? Prepare the journal entry for this stock dividend. CONCEPTUAL CONNECTION How much would Lance have reported for total assets and retained earnings on December 31, 2019, if the firm had effected a 2-for-l stock split on December 31, 2019? Is a journal entry needed to record the stock split? Why or why not?
COMMON AND PREFERRED CASH DIVIDENDS Ramirez Company currently has 100,000 shares of 1 par common stock outstanding and 5,000 shares of 50 par preferred stock outstanding. On July 10, the board of directors declared a semiannual dividend of 0.30 per share on common stock to shareholders of record on August 1, payable on August 5. On July 15, the board of directors declared a semiannual dividend of 5 per share on preferred stock to shareholders of record on August 5, payable on August 10. Prepare journal entries for the declaration and payment of the common and preferred stock cash dividends.
Exercise 6-4 (Cash, Share Capital, and Property Dividends) The PQR Corporation reports the following balances of January 1, 2021: P50,000 Ordinary share capital, P25 par, 2,000 shares outstanding Ordinary share premium Retained earnings 20,000 150,000 The following dividend declarations were made during the year: Mar 15 Declared a cash dividend of P6 per share payable on April 15 to shareholders of record of March 31. July 15 Declared as dividends the stocks of Pentagon Corp. owned by PQR Corp. One share of Pentagon Corp. stock will be distributed for every share of PQR Corp. stock owned. The stocks of Pentagon have a carrying value of P25 per share. Oct 15 Declared a 30% stock dividend distributable on December 1 to shareholders of record of November 15. Stocks are selling on this date at P45 per share. Instructions: Record the declaration and distribution of the above dividends. ♡ Share Favourite Delete Edit More a O O
Problem 6: Treasury Shares year 20x1: Valientes Corporation reported the shareholders. Equity at the beginning of the Ordinary share, P10 par, outstanding 225,000 shares Share Premium Retained Earnings 2,250,000 1,500,000 2,000,000 During the year, the entity had the following treasury shares transactions: Acquired 10,000 treasury shares for P500,000. Sold 5,000 treasury shares at P60 per share - Sold 2,000 treasury shares at P45 per share. Required: a. Prepare the journal entries b. Prepare the shareholders' equity at the end of the year
Problem 16-3 (IAA) Effective Company had the following long-term investments at the beginning of the current year: Investment in SMC preference shares, 12% P200 par, 5,000 shares Investment in Benguet ordinary shares, 10,000 shares 1,200,000 1,000,000 During the current year, the following transactions were completed: 1. Purchased 4,000 ordinary shares of ANA Company for P300,000. 2. Received 2,000 ordinary shares of Benguet Company in lieu of a cash dividend of P10 per share. On this date, Benguet ordinary share has a quoted market of P60. 3. Purchased 6,000 ordinary shares of ANA Company for P420,000. 4. Received semiannual dividend on SMC Company 12% preference share. 5. ANA ordinary share was split on a 2-for-1 basis. 6. Sold 8,000 ordinary shares of ANA Company at P85 less transaction costs of 5%. Use average approach. Required: a. Prepare journal entries to record the transactions. b. Prepare a summary of the portfolio of investments stating the number of shares and the…
Chapter 14 Homework The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2. Comparative Retained Earnings StatementFor the years ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained Earnings, Jan. 1 3,704,000 3,264,000 Net Income 600,000 550,000 Dividends: On Preferred Stock (10,000) (10,000) On Common Stock (100,000) (100,000) Increase in Retained Earnings 490,000 440,000 Retained Earnings, Dec. 31 4,194,000 3,704,000 Comparative Income StatementFor the years ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales 10,850,000 10,000,000 Cost of goods sold (6,000,000) (5,450,000) Gross Profit 4,850,000 4,550,000 Selling Expenses (2,170,000) (2,000,000) Administrative Expenses (1,627,500) (1,500,000) Total Operating Expenses (3,797,500) (3,500,000) Operating…
Problem #9 Entries for Share Dividends E. Tan Med-Care Inc. is a health insurance corporation. The following account balances appear on the statement of financial position of E. Tan Med-Care Inc.: Ordinary Shares (50,000 shares authorized), P10 par, P400,000; Share Premium-Ordinary, P42,500; and Retained Earnings, P299,500. The board of directors declared a 4% share dividend when the market price of the stock was P15 a share. Required: 1. Journalize the entries to record a. the declaration of the dividend. b. the issuance of the shares. 2. Determine the following amounts before the share dividend was declared: a. total share capital b. total retained earnings C. total shareholders' equity 3. Determine the following amounts after the share dividend was declared: a. total share capital b. total retained earnings total shareholders' equity C.
On January 1, 200B Earth Corporation showed the following balances: II. Share Capital, 100 par, 200,000 Shares authorized, 80,000 shares issued Share Premium Retained Earnings 8,000,000 500,000 6,000,000 The net income for two consecutive years as well as the other transactions affecting the retained earnings is summarized below: 200B Dec. 31 The net income for the year was 3,000,000 Dec. 31 A cash dividend of 15 per share was declared payable on January 31, 20OC, to all shareholders of records as of January 15, 200C. 2000 Jan 31 Paid the cash dividends declared in 200B Dec. 31 The net income for the year was 3,500,000 Dec. 31 Declared a 10% stock dividend. The market price of the share capital on this date was 125 per share Required: a. Journal entries to record the above transactions including the entry to close the Income and Expense Summary Account (S b. Balance of the Retained Earnings account as of: b.1 December 31, 200B b.2 December 31, 200C
QS 11-12 (Algo) Dividend allocation between classes of shareholders LO C2 Stockholders' equity of Ernst Company consists of 89,000 shares of $5 par value, 9% cumulative preferred stock and 325,000 shares of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not declare any dividends in the prior year, but it now declares and pays a $140,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company. Calculation of preferred dividend: Total cash dividend To preferred shareholders To common shareholders Par Value per Preferred Share Dividend Rate % Dividend per Preferred Share
Problem #9 Entries for Share Dividends E Tan Med-Care Inc. is a health insurance corporation. The following account balances appear on the statement of financial position of E. Tan Med-Care Inc.: Ordinary Shares (50,000 shares authorized), P10 par, P400,000; Share Premium-Ordinary, P42,500, and Retained Earnings, P299,500. The board of directors declared a 4% share dividend when the market price of the stock was P15 a share. Required: 1. Journalize the entries to record a. the declaration of the dividend. b. the issuance of the shares. 2. Determine the following amounts before the share dividend was declared: a. total share capital b. total retained earnings c. total shareholders' equity 3. Determine the following amounts after the share dividend was declared: a. total share capital b. total retained earnings c. total shareholders' equity

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