QUESTION 1 The preferred stock has 557,740 shares authorized, with a par value of $100 and an annual $3.75 per share cumulative dividend preference. On Jan 1, 557,649 shares of preferred are issued and 546,024 shares are outstanding. There were also 1.8 billion shares of $1 par value common stock authorized, of which 924.6 million are issued and 844.8 million are outstanding. There was also $1M outstanding dividend liability on preferred stock. During the year, if $5M of dividend were declared by the board, the amount distributed to preferred stockholders is $ distributed to common stockholders, and dividend per share for common stock is $ (round to 3 decimals). If the entity had non-cumulative preferred stock, then the 2$ amount of dividend that will be distributed to preferred stockholders will be $ to common stockholders, and dividend per share for common stock is $ (round to 3 decimals). The entity issued an additional 63,360,000 common stocks, which is a % stock dividend, and common stock will increase by $ , and paid in capital in excess of par will increased by $ if the prevailing price on the date of declaration is $1.25. EPS will be $ (round to 3 decimals) if net income is $15M.

QUESTION 1 The preferred stock has 557,740 shares authorized, with a par value of $100 and an annual $3.75 per share cumulative dividend preference. On Jan 1, 557,649 shares of preferred are issued and 546,024 shares are outstanding. There were also 1.8 billion shares of $1 par value common stock authorized, of which 924.6 million are issued and 844.8 million are outstanding. There was also $1M outstanding dividend liability on preferred stock. During the year, if $5M of dividend were declared by the board, the amount distributed to preferred stockholders is $ distributed to common stockholders, and dividend per share for common stock is $ (round to 3 decimals). If the entity had non-cumulative preferred stock, then the 2$ amount of dividend that will be distributed to preferred stockholders will be $ to common stockholders, and dividend per share for common stock is $ (round to 3 decimals). The entity issued an additional 63,360,000 common stocks, which is a % stock dividend, and common stock will increase by $ , and paid in capital in excess of par will increased by $ if the prevailing price on the date of declaration is $1.25. EPS will be $ (round to 3 decimals) if net income is $15M.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...

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Raun Company had the following equity items as of December 31, 2019: Preferred stock, 9% cumulative, 100 par, convertible Paid-in capital in excess of par value on preferred stock Common stock, 1 stated value Paid-in capital in excess of stated value on common stock| Retained earnings The following additional information about Raun was available for the year ended December 31, 2019: 1. There were 2 million shares of preferred stock authorized, of which 1 million were outstanding. All 1 million shares outstanding were issued on January 2, 2016, for 120 a share. The preferred stock is convertible into common stock on a 1-for-1 basis until December 31, 2025; thereafter, the preferred stock ceases to be convertible and is callable at par value by the company. No preferred stock has been converted into common stock, and there were no dividends in arrears at December 31, 2019. 2. The common stock has been issued at amounts above stated value per share since incorporation in 2002. Of the 5 million shares authorized, 3,580,000 were outstanding at January 1, 2019. The market price of the outstanding common stock has increased slowly but consistently for the last 5 years. 3. Raun has an employee share option plan where certain key employees and officers may purchase shares of common stock at 100% of the marker price at the date of the option grant. All options are exercisable in installments of one-third each year, commencing 1 year after the date of the grant, and expire if not exercised within 4 years of the grant date. On January 1, 2019, options for 70,000 shares were outstanding at prices ranging from 47 to 83 a share. Options for 20,000 shares were exercised at 47 to 79 a share during 2019. During 2019, no options expired and additional options for 15,000 shares were granted at 86 a share. The 65,000 options outstanding at December 31, 2019, were exercisable at 54 to 86 a share; of these, 30,000 were exercisable at that date at prices ranging from 54 to 79 a share. 4. Raun also has an employee share purchase plan whereby the company pays one-half and the employee pays one-half of the market price of the stock at the date of the subscription. During 2019, employees subscribed to 60,000 shares at an average price of 87 a share. All 60,000 shares were paid for and issued late in September 2019. 5. On December 31, 2019, there was a total of 355,000 shares of common stock set aside for the granting of future share options and for future purchases under the employee share purchase plan. The only changes in the shareholders equity for 2019 were those described previously, the 2019 net income, and the cash dividends paid. Required: Prepare the shareholders equity section of Rauns balance sheet at December 31, 2019. Substitute, where appropriate, Xs for unknown dollar amounts. Use good form and provide full disclosure. Write appropriate notes as they should appear in the publisher financial statements.
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.
Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
Outstanding Stock Lars Corporation shows the following information in the stockholders equity section of its balance sheet: The par value of common stock is S5, and the total balance in the Common Stock account is $225,000. There are 13,000 shares of treasury stock. Required: What is the number of shares outstanding? Use the following information for Exercises 10-58 and 10-59: Stahl Company was incorporated as a new business on January 1, 2019. The company is authorized to issue 600,000 shares of $2 par value common stock and 80,000 shares of 6%, S20 par value, cumulative preferred stock. On January 1, 2019, the company issued 75,000 shares of common stock for $15 per share and 5,000 shares of preferred stock for $25 per share. Net income for the year ended December 31, 2019, was $500,000.
Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below. Preferred stock subscriptions receivable 50,000 Preferred stock, 10 par, 9% (200,000 shares authorized; 20,000 shares issued)200,000 Preferred stock subscribed (10,000 shares)100,000 Paid-in capital in excess of parpreferred stock40,000 Common stock, 10 par (100,000 shares authorized; 60,000 shares issued)600,000 Paid-in capital in excess of parcommon stock250,000 Retained earnings750,000 During 20--, Gonzales Company completed the following transactions affecting stockholders equity: (a) Received 20,000 for the balance due on subscriptions for 4,000 shares of preferred stock with a par value of 40,000 and issued the stock. (b) Purchased 10,000 shares of common treasury stock for 18 per share. (c) Received subscriptions for 10,000 shares of common stock at 19 per share, collecting down payments of 45,000. (d) Issued 15,000 shares of common stock in exchange for land with a fair market value of 290,000. (e) Sold 5,000 shares of common treasury stock for 100,000. (f) Issued 10,000 shares of preferred stock at 11.50 per share, receiving cash. (g) Sold 3,000 shares of common treasury stock for 17 per share. REQUIRED 1. Prepare general journal entries for the transactions, identifying each transaction by letter. 2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of 300,000. 3. Prepare the stockholders equity section of the balance sheet as of December 31, 20--. Net income for the year was 825,000 and dividends of 400,000 were paid.
STOCK SUBSCRIPTIONS Juneau Associates had the following stock transactions during the year: (a) Received subscriptions for 100,000 shares of 1 par common stock for 105,000. (b) Received subscriptions for 5,000 shares of 15 par, 8% preferred stock for 80,000. (c) Received a payment of 55,000 on the common stock subscription. (d) Received a payment of 40,000 on the preferred stock subscription. (e) Issued 40,000 shares of 1 par common stock in exchange for a truck with a fair market value of 48,000. (f) Received the balance in full for the common stock subscription and issued the stock. (g) Received the balance in full for the preferred stock subscription and issued the stock. REQUIRED Prepare general journal entries for these transactions, identifying each by letter.
Preferred Dividends Eastern Inc.s equity includes 8%, $25 par preferred stock. There are 100,000 shares authorized and 45,000 shares outstanding. Assume that Eastern declares and pays preferred dividends quarterly. Required: Prepare the journal entry to record declaration of one quarterly dividend. Prepare the journal entry to record payment of the one quarterly dividend.
PAR AND NO-PAR, COMMON AND PREFERRED STOCK Valdez Company had the following stock transactions during the first 5 years of operations: (a) Issued 24,000 shares of 1 par common stock for 26,000 cash. (b) Issued 18,000 shares of 1 par common stock for 18,000 cash. (c) Issued 3,000 shares of 10 par, 7% preferred stock for 30,000 cash. (d) Issued 4,500 shares of 10 par, 7% preferred stock for 46,500 cash. (e) Issued 1,800 shares of no-par common stock for 10,475 cash. (f) Issued 1,100 shares of no-par, 7 preferred stock for 32,000 cash. REQUIRED 1. Prepare general journal entries for these transactions, identifying each by letter. 2. Assume that stock transactions a, b, and c occurred in year 1. The amount available for dividends at the end of year 1 is 12,600. Prepare the dividend allocation between the preferred and common shares in total and per share for year 1.
Texas Inc. has 6,629 shares of 8%, $100 par value cumulative preferred stock and 84,120 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock? a. $6,629 in total Ob. $80.00 per share Oc. $53,032 in total d. $6,730 in total
Day Inc. has 6,541 shares of 5%, $100 par value cumulative preferred stock and 90,851 shares of $1 par value common stock outstanding at December 31. What is the annual dividend on the preferred stock? Select the correct answer. a-$4,543 in total b-$32,705 in total c-$50.00 per share d-$6,541 in total
Use the following to answer questions 6 – 12 J&TR, Inc., has two classes of stock authorized: $100.00 par preferred and $0.10 par value common. As of the beginning of 20XC, 10,000 shares of preferred stock and 800,000 shares of common stock have been issued. Record the following transactions to complete the Statement of Stockholders’ Equity: Effect on Stockholders' Equity L.Mar Issue 5,000 additional shares of preferred stock for S102.50 per share L-Apr ssue 100,000 additional shares of common stock for $25.00 per share Declare a cash dividend on both common and 1-Jun preferred stock of $0.75 per share to all stockholders of record on June 15. 30-Jun Pay the cash dividend declared on June 1. LAve Repurchase (buy) 50,000 shares of common treasury stock for $26.00 per share Resell 40,000 shares of treasury stock purchased on August 1 for $26.50 per share 31-Dec Net income for the year was $750,000 1-Oct The beginning balances are shown below. Complete the Equity Statement of…
The following data is available for Crane Corporation at December 31, 2025: Common stock, par $10 (authorized 31500 shares) $283500 Treasury stock (at cost $15 per share) $1080 Based on the data, how many shares of common stock are issued? O 28278. O 31428. O 31500. O 28350.