DeVry ACC 312 Week 3 Homework Exercises 2014

Week Three - Homework Exercises E18-5, E18-11, E18-13, and E18-19

E18-5 During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 8 million common shares, $1 par per share, and 1 million preferred shares, $50 par per share.

Required: Prepare the appropriate journal entries to record each transaction.

Feb. 12 Sold 2 million common shares, for $9 per share.

13 Issued 40,000 common shares to attorneys in exchange for legal services.

13 Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000. Nov. 15 Issued 380,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000.

E18-11 Borner Communications’ articles of incorporation authorized the issuance of 130 million common shares. The transactions described below effected changes in Borner’s outstanding shares. Prior to the transactions, Borner’s shareholders’ equity included the following:

Shareholders' Equity ($ in millions)

Common stock, 100 million shares at $1 par $100

Paid-in capital----excess of par 300

Retained earnings 210

Required: Assuming that Borner Communications retires shares it reacquires (restores their status to that of authorized but unissued shares), record the appropriate journal entry for each of the following transactions:

1. On January 7, 2013, Borner reacquired 2 million shares at $5.00 per share.

2. On August 23, 2013, Borner reacquired 4 million shares at $3.50 per share.

3. On July 25, 2014, Borner sold 3 million common shares at $6 per share.

E18-13 In 2013, Western Transport Company entered into the treasury stock transactions described below. In 2011, Western Transport had issued 140 million shares of its $1 par common stock at $17 per share.

Cash (140 million x $17) 2,380

Common stock (140 million x $16) 140

PIC in excess of par-C/S (140 million x $16) 2,240

Required: Prepare the appropriate journal entry for each of the following transactions:

1. On January 23, 2013, Western Transport reacquired 10 million shares at $20 per share.

2. On September 3, 2013, Western Transport sold 1 million treasury shares at $21 per share.

3. On November 4, 2013, Western Transport sold 1 million treasury shares at $18 per share.

E18-19 The shareholders’ equity of Core Technologies Company on June 30, 2012, included the following:

Common stock , $1 par; authorized, 8 million shares;

issued and outstanding, 3 million shares

Paid-in capital---excess of par

Retained earnings

On April 1, 2013, the board of directors of Core Technologies declared a 10% stock dividend

on common shares, to be distributed on June 1. The market price of Core Technologies’

common stock was $30 on April 1, 2013, and $40 on June 1, 2013.

Required: Prepare the journal entry to record the distribution of the stock dividend on the declaration date.