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Download the attach file Chapter 13: Corporation?

Financial Accounting?


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Lab #5 ? Chapter 13

 

1) Brockbank Corporation was organized on July 15, 2012. The state authorized 30,000 shares of 7%

 

noncumulative $20 par value preferred stock and 100,000 shares of $2 par value common stock.

 

Record the journal entries for Brockbank to account for the following:

 

a) Brockbank gave 6,000 shares of common stock to its attorney in return for her help in

 

incorporating the business. Fees for this work was $18,000. (Note: The debit is to Legal

 

Expense.)

 

Date

 

Account

 

Debit

 

Credit

 

July 15

 


 

b) Brockbank gave 15,000 shares of common stock to an individual who contributed a building

 

worth $50,000.

 

Date

 

Account

 

Debit

 

Credit

 

July 15

 


 

Date

 

July 15

 


 

Date

 

July 15

 


 

c) Brockbank issued 5,000 shares of preferred stock at $25 per share.

 

Account

 

Debit

 


 

Credit

 


 

d) Peter Brockbank paid $70,000 cash for 30,000 shares of common stock.

 

Account

 

Debit

 


 

Credit

 


 

2) Metz Motors Corporation has 2,000,000 authorized shares of $10 par value common stock. As of

 

June 30, 2010, there were 1,000,000 shares issued and outstanding. On June 30, 2010, the board

 

of directors declared a $0.20 per share cash dividend to be paid on August 1, 2010, to

 

shareholders of record on July 15, 2010. Prepare the necessary entries in journal form to be

 

recorded on (a) the date of declaration, (b) the date of record, and (c) the date of payment.

 

(a)

 

Date

 

Account

 

Debit

 

Credit

 

June 30

 


 

(b)

 

Date

 

July 15

 


 

Account

 


 

Debit

 


 

Credit

 


 

(c)

 

Date

 

Aug 1

 


 

Account

 


 

Debit

 


 

Credit

 


 

3) Prepare in proper form the stockholders? equity section of the balance sheet from the following

 

selected accounts and balances taken from the adjusted trial balance of Pathway Corporation on

 

June 30, 2010.

 

Partial Adjusted Trial Balance

 

Account

 

Debit

 

Credit

 

Common Stock?$10 stated value, 50,000 shares authorized,

 

45,000 shares outstanding

 

$450,000

 

Preferred Stock?$100 par value, 8 percent cumulative convertible,

 

3,000 shares authorized and outstanding

 

300,000

 

Additional Paid-in Capital, Preferred

 

15,000

 

Additional Paid-in Capital, Common

 

75,000

 

Retained Earnings

 

30,000

 

Pathway Corporation

 

Stockholders? Equity

 

June 30, 2010

 

Contributed Capital:

 

Preferred stock?$100 par value, 8 percent cumulative

 

convertible, 3,000 shares authorized and outstanding??????. $

 

Additional paid-in capital, preferred?????????????????. ____________ $

 

Common stock?$10 stated value, 50,000 shares authorized,

 

45,000 shares outstanding??????????????????????. $

 

Additional paid-in capital, common?????????????????? ____________ ____________

 

Total contributed capital????????????????????????.

 

$

 

Retained earnings?????????????????????????????.

 

____________

 

Total Stockholders? equity

 

$___________

 


 

4) Duncan Corporation has 2,000 shares of $100 par value, 6 percent cumulative preferred stock

 

and 20,000 shares of $10 par value common stock outstanding. In its first four years of

 

operation, Duncan Corporation paid cash dividends as follows: 2007, $15,000; 2008, $0; 2009,

 

$20,000; 2010, $25,000. Calculate the total cash dividends and the dividends per share received

 

by owners of preferred and common stock in each year.

 


 

Year

 

2007

 

2008

 

2009

 

2010

 


 

Dividends

 

Paid

 

$15,000

 

-020,000

 

25,000

 


 

Arrears

 


 

Preferred Dividends

 

Total

 

Per

 

Dividend

 

Share

 


 

Common Dividends

 

Total

 

Per

 

Dividend

 

Share

 


 

5) Poquito Corporation had both the following transactions occur on the same day:

 

a. Issued 30,000 shares of its $5 par value common stock for $360,000 cash.

 

b. Issued 10,000 shares of its $5 par value common stock in exchange for land and a building.

 

The building is estimated to have a market value of $90,000.

 

Prepare the entries in journal form to record the above transactions.

 

Account

 

Debit

 

Credit

 

a.

 


 

b

 

.

 


 

6) Prepare the entries in journal form necessary to record the following stock transactions of

 

Fitzgerald Corporation. These transactions represent all treasury stock transactions entered into

 

by the company.

 

June 1 Purchased 2,000 shares of its own $30 par value common stock for $70 per share, the

 

current price.

 

Account

 

Debit

 

Credit

 


 

June 10 Sold 500 shares of treasury stock purchased on June 1 for $80 per share.

 

Account

 

Debit

 


 

Credit

 


 

June 20 Sold 700 shares of treasury stock purchased on June 1 for $58 per share.

 

Account

 

Debit

 


 

Credit

 


 

June 30 Retired the remaining shares purchased on June 1. The original issue price was $42 per

 

share.

 

Account

 

Debit

 

Credit

 


 

 


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