119. Special sections in an income statement
What is the purpose of arranging an income statement to show subtotals for Income from Continuing Operations and for Income before Extraordinary Items?
120. Accounting changes and prior period adjustment
Prior period adjustments affect the income of past accounting periods. Explain how prior period adjustments are shown in the financial statements.
121. Stock dividends
What is the effect of a stock dividend?
122. MRB Company purchased 1000 shares of its own outstanding $12 par value common stock for $16 per share and then sold 400 shares six months later for $19 a share. Prepare the journal entries for the purchase of the stock and for the sale.
123. Baron Corporation was authorized by its charter to issue 80,000 shares of 12%, $100 par cumulative preferred stock and 200,000 shares of $1 par value common stock. In their first year of operations, they had the following transactions.
(1) Sold 50,000 shares of common stock for $300,000 on January 1.
(2) Sold 3,000 shares of preferred stock for $360,000 on January 1.
(3) Earned $185,000 for the sale of their merchandise of which $135,000 was on credit.
(4) Had expenses of $122,500 in connection with selling the merchandise. All expenses were paid in cash.
(5) Purchased 5,000 shares of outstanding common stock for $8.00 per share for the treasury.
(6) Declared a dividend of $.20 per share of common stock and for the amount due the preferred stock.
(7) Paid the required dividends
Required:
(a) Prepare the necessary journal entries
(b) Prepare the stockholders' equity section of the balance sheet.