Explanation Common stock : These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend. Par value : It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock. Stated value: It refers to an amount per share, which is assigned by the board of directors to no par value stock. Preferred stock : The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock. Treasury Stock : It refers to the shares that are reacquired by the corporation that are already issued to the stockholders, but reacquisition does not signify retirement. Prepare journal entry to record the issuance of 10,000 shares of common stock for $35 per share. Date Account Title and Explanation Post Ref. Debit($) Credit($) January 2,2018 Cash 3,500,000 Common stock 100,000 Paid-in capital in excess of par value 3,400,000 (To record 100,000, $1 par value common stock issued at $35 per stock) Table (1) Working note: Cash received is $ 3 , 500 , 000 ( 100 , 000 × $ 35 ) Common stock is $ 100 , 000 ( 100 , 000 × $ 1 ) Paid-in capital in excess of par is $ 3 , 400 , 000 ( $ 3 , 500 , 000 − $ 100 , 000 ) Description: Cash is an asset. There is an increase in asset value. Therefore, it is debited. Common stock account and paid in capital in excess of par value are stockholders’ equity . There is an increase in stockholders’ equity value. Therefore, it is credited. Prepare journal entry to record the issuance of 3,000 shares of $10 par value preferred stock for $11 per share. Date Account Title and Explanation Post Ref. Debit($) Credit($) February 6,2018 Cash 33,000 Preferred stock 30,000 Paid-in capital in excess of par value 3,000 (To record 3,000, $10 par value preferred stock issued at $11 per stock) Table (2) Description: Cash is an asset

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ISBN: 9781259307959

Author: J. David Spiceland, Wayne M Thomas, Don Herrmann

Publisher: McGraw-Hill Education

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Chapter 10 Solutions

Financial Accounting

Ch. 10 - Corporations typically do not first raise capital...Ch. 10 - What is the difference between a public and a...Ch. 10 - Prob. 3RQ Ch. 10 - Which form of business organization is most...Ch. 10 - Prob. 5RQ Ch. 10 - Prob. 6RQ Ch. 10 - 7.Explain the difference between authorized,...Ch. 10 - Prob. 8RQ Ch. 10 - Prob. 9RQ Ch. 10 - What are the three potential features of preferred...

Ch. 10 - Prob. 11RQ Ch. 10 - Prob. 12RQ Ch. 10 - How is the accounting for a repurchase of a...Ch. 10 - Prob. 14RQ Ch. 10 - Prob. 15RQ Ch. 10 - Prob. 16RQ Ch. 10 - Prob. 17RQ Ch. 10 - 18.What happens to the par value, the shares...Ch. 10 - Prob. 19RQ Ch. 10 - Prob. 20RQ Ch. 10 - Prob. 21RQ Ch. 10 - Prob. 22RQ Ch. 10 - Prob. 23RQ Ch. 10 - Prob. 10.1BE Ch. 10 - Prob. 10.2BE Ch. 10 - Record issuance of common stock (LO102) Western...Ch. 10 - Prob. 10.4BE Ch. 10 - Prob. 10.5BE Ch. 10 - Recognize preferred stock features (LO103) Match...Ch. 10 - Determine the amount of preferred Stock dividends...Ch. 10 - Prob. 10.8BE Ch. 10 - Prob. 10.9BE Ch. 10 - Record cash dividends (LO105) Divine Apparel has...Ch. 10 - Prob. 10.11BE Ch. 10 - Prob. 10.12BE Ch. 10 - Indicate effects on total stockholders equity...Ch. 10 - Prepare the stockholders equity section (LO107)...Ch. 10 - Prob. 10.15BE Ch. 10 - Prob. 10.1E Ch. 10 - Prob. 10.2E Ch. 10 - Prob. 10.3E Ch. 10 - Prob. 10.4E Ch. 10 - Record common stock, preferred stock, and dividend...Ch. 10 - Prob. 10.6E Ch. 10 - Prob. 10.7E Ch. 10 - Record cash dividends (LO105) On March 15,...Ch. 10 - Prob. 10.9E Ch. 10 - Record stock dividends and stock splits (LO106) On...Ch. 10 - Prob. 10.11E Ch. 10 - Prob. 10.12E Ch. 10 - Indicate effects on total stockholders equity...Ch. 10 - Prob. 10.14E Ch. 10 - Prob. 10.15E Ch. 10 - Calculate and analyze ratios (LO108) Financial...Ch. 10 - (LO 102, 104, 105, 108) On January 1, 2018, the...Ch. 10 - Prob. 10.1AP Ch. 10 - Prob. 10.2AP Ch. 10 - Indicate effect of stock dividends and stock...Ch. 10 - Prob. 10.4AP Ch. 10 - Understand stockholders equity and the statement...Ch. 10 - Record equity transactions and prepare the...Ch. 10 - Prob. 10.7AP Ch. 10 - Match terms with their definitions (LO101 to 108)...Ch. 10 - Record equity transactions and indicate the effect...Ch. 10 - Prob. 10.3BP Ch. 10 - Prob. 10.4BP Ch. 10 - Prob. 10.5BP Ch. 10 - Record equity transactions and prepare the...Ch. 10 - Prob. 10.7BP Ch. 10 - Prob. 10.1APCP Ch. 10 - Financial Analysis American Eagle Outfitters, Inc....Ch. 10 - Prob. 10.3APFA Ch. 10 - Comparative Analysis Buckle American Eagle...Ch. 10 - Ethics Put yourself in the shoes of a company...Ch. 10 - Written Communication Preferred stock has...Ch. 10 - Earnings Management Renegade Clothing is...

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