acct 212 chapter 13 homework 1

Aloha Corporation issues 16,000 shares of its common stock for $222,000 cash on February 20.

1.

Assume the stock has neither par nor stated value. Prepare journal entries to record this event. (Omit the "$" sign in your response.)

2.

Assume the stock has a $11 par value. Prepare journal entries to record this event. (Omit the "$" sign in your response.)

3.

Assume the stock has an $5.5 stated value. Prepare journal entries to record this event. (Omit the "$" sign in your response.)

Q2

Exercise 13-3 Recording stock issuances L.O. P1

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Exercise 13-3 Part 1

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Exercise 13-3 Part 2

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Exercise 13-3 Part 3

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Exercise 13-3 Part 4

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Exercise 13-6 Stock dividends and splits L.O. P2

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The stockholders’ equity of Whiz.com Company at the beginning of the day on February 5 follows.

Common stock—$5 par value, 150,000 shares authorized,
83,000 shares issued and outstanding

$

415,000

Paid-in capital in excess of par value, common stock

525,000

Retained earnings

675,000

Total stockholders’ equity

$

1,615,000

On February 5, the directors declare a 12% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $39 per share on February 5 before the stock dividend. The stock’s market value is $35 per share on February 28.

Section Break

Exercise 13-7 Stock dividends and per share book values L.O. P2

1.

Prepare entries to record both the dividend declaration and its distribution. (Omit the "$" sign in your response.)

Worksheet

Difficulty: Medium

Exercise 13-7 Part 1

Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

2.

One stockholder owned 950 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholder’s shares immediately before and after the stock dividend of February 5. (Do not round intermediate calculations. Round book value per share to 2 decimal places and other answers to the nearest dollar amount. Omit the "$" sign in your response.)

Worksheet

Difficulty: Medium

Exercise 13-7 Part 2

Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

3.

Compute the total market value of the investor’s shares in part 2 as of February 5 and February 28.(Omit the "$" sign in your response.)

Worksheet

Difficulty: Medium

Exercise 13-7 Part 3

Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

Wade’s outstanding stock consists of 13,000 shares of noncumulative 7.30% preferred stock with a $10 par value and also 32,500 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

Determine the amount of dividends paid each year to each of the two classes of stockholders. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Compute the total dividends paid to each class for the four years combined. (Omit the "$" sign in your response.)

Worksheet

Difficulty: Medium

Exercise 13-8 Dividends on common and noncumulative preferred stock L.O. C2

Learning Objective: 13-C2 Explain characteristics of, and distribute dividends between, common and preferred stock.

Wade’s outstanding stock consists of 53,000 shares of cumulative 9.50% preferred stock with a $10 par value and also 132,500 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

Determine the amount of dividends paid each year to each of the two classes of stockholders. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Determine the total dividends paid to each class for the four years combined. (Omit the "$" sign in your response.)

The following information is available for Ballard Company for the year ended December 31, 2011.

a.

Balance of retained earnings, December 31, 2010, prior to discovery of error, $870,000.

b.

Cash dividends declared and paid during 2011, $13,000.

c.

It neglected to record 2009 depreciation expense of $42,600, which is net of $6,400 in income taxes.

d.

The company earned $220,000 in 2011 net income.

Prepare a 2011 statement of retained earnings for Ballard Company. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

Guess Company reports $1,375,000 of net income for 2011 and declares $192,500 of cash dividends on its preferred stock for 2011. At the end of 2011, the company had 320,000 weighted-average shares of common stock.

1.

What amount of net income is available to common stockholders for 2011? (Omit the "$" sign in your response.)

2.

What is the company’s basic EPS for 2011? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Franklin Company reports $2,000,000 of net income for 2011 and declares $280,000 of cash dividends on its preferred stock for 2011. At the end of 2011, the company had 290,000 weighted-average shares of common stock.

1.

What amount of net income is available to common stockholders for 2011? (Omit the "$" sign in your response.)

2.

What is the company’s basic EPS for 2011? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Worksheet

Difficulty: Medium

Exercise 13-13 Earnings per share L.O. A1

Compute the dividend yield for each of these four separate companies. (Round your answers to 1 decimal place. Omit the "%" sign in your response.)

Which company’s stock would probably not be classified as an income stock?

Worksheet

Difficulty: Medium

Exercise 13-14 Dividend yield computation and interpretation L.O. A3

Learning Objective: 13-A3 Compute dividend yield and explain its use in analysis.

Compute the price-earnings ratio for each of these four separate companies. (Round your answers to 1 decimal place.)

Which stock might an analyst likely investigate as being potentially undervalued by the market?

Worksheet

The equity section of Webster Corporation’s balance sheet shows the following.

Preferred stock—5% cumulative, $20 par value, $25 call price,
10,000 shares issued and outstanding

$

200,000

Common stock—$10 par value, 35,000 shares issued and outstanding

350,000

Retained earnings

267,500

Total stockholders’ equity

$

817,500

Determine the book value per share of the preferred and common stock under two separate situations.(Round your answers to 2 decimal places. Omit the "$" sign in your response.)

1.

No preferred dividends are in arrears.

2.

Three years of preferred dividends are in arrears.

Unilever Group reports the following equity information for the years ended December 31, 2007 and 2008 (euros in millions).

December 31

2008

2007

Share capital

€

499

€

499

Share premium

136

168

Other reserves

(6,455

)

(3,414

)

Retained profit

15,826

15,169

Shareholders’ equity

€

10,006

€

12,422

1.

Match each of the three account titles share capital, share premium, and retained profit with the usual account title applied under U.S. GAAP.

a.

Share capital

Common stock, par value

b.

Share premium

Paid-in capital in excess of par value, common stock

c.

Retained profit

Retained earnings

2.

Prepare Unilever’s journal entry, using its account titles, to record the issuance of capital stock assuming that its entire par value stock was issued on December 31, 2007, for cash. (Enter answers in millions of euros and not in whole euros. Omit the "€" sign in your response.)

General journal

Debit

Credit

Cash

667

Share capital

Share premium

3.

What were Unilever’s 2008 dividends assuming that only dividends and income impacted retained profit for 2008 and that its 2008 income totaled €2,676? (Enter answers in millions of euros and not in whole euros. Omit the "€" sign in your response.)

Dividends

€ 2,019

Worksheet

Difficulty: Medium

Learning Objective: 13-P1 Record the issuance of corporate stock.

Exercise 13-17 Accounting for equity under IFRS L.O. C3, P1

Learning Objective: 13-C3 Explain the items reported in retained earnings.

Kroll Corporation reports the following components of stockholders’ equity on December 31, 2011.

Common stock—$27 par value, 52,000 shares authorized,
42,000 shares issued and outstanding

$

1,134,000

Paid-in capital in excess of par value, common stock

51,000

Retained earnings

268,000

Total stockholders’ equity

$

1,453,000

In year 2012, the following transactions affected its stockholders’ equity accounts.

Jan.

2

Purchased 3,600 shares of its own stock at $27 cash per share.

Jan.

7

Directors declared a $1 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record.

Feb.

28

Paid the dividend declared on January 7.

July

9

Sold 400 of its treasury shares at $32 cash per share.

Aug.

27

Sold 3,200 of its treasury shares at $25 cash per share.

Sept.

9

Directors declared a $1 per share cash dividend payable on October 22 to the September 23 stockholders of record.

Oct.

22

Paid the dividend declared on September 9.

Dec.

31

Closed the $8,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required:

1.

Prepare journal entries to record each of these transactions for 2012. (Omit the "$" sign in your response.)

2.

Prepare a statement of retained earnings for the year ended December 31, 2012. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

3.

Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2012.(Omit the "$" sign in your response.)

Worksheet

Difficulty: Hard

Learning Objective: 13-P2 Record transactions involving cash dividends, stock dividends, and stock splits.

Exercise 13-18 Cash dividends, treasury stock, and statement of retained earnings L.O. C3, P2, P3

Learning Objective: 13-C3 Explain the items reported in retained earnings.

Learning Objective: 13-P3 Record purchases and sales of treasury stock and the retirement of stock.