Ex. 275
During 2011, Pine Corporation had the following transactions and events:
1.Issued par value preferred stock for cash at par value.
2.Issued par value common stock for cash at an amount greater than par value.
3.Completed a 2 for 1 stock split in which the $10 par value common stock was changed to $5 par value stock.
4.Declared a small stock dividend when the market value was higher than the par value.
5.Declared a cash dividend.
6.Made a prior period adjustment for understatement of net income.
7.Issued par value common stock for cash at par value.
8.Paid the cash dividend.
9.Issued the shares of common stock required by the stock dividend declaration in 4. above.
Instructions
Indicate the effect(s) of each of the foregoing items on the subdivisions of stockholders' equity. Present your answers in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect.
Paid-in Capital
Capital AdditionalRetained
Item Stock Paid-in CapitalEarnings
Ex. 276
The following information is available for Ellis Corporation:
Common Stock ($5 par)$1,500,000
Retained Earnings900,000
A 15% stock dividend is declared and paid when the market value was $15 per share.
Instructions
Compute each of the following after the stock dividend.
(a)Total stockholders' equity.
(b)Number of shares outstanding.
Ex. 277
On January 1, 2011, Penton Corporation had $2,000,000 of $10 par value common stock outstanding that was issued at par and retained earnings of $1,000,000. The company issued 200,000 shares of common stock at $12 per share on July 1. On December 15, the board of directors declared a 15% stock dividend to stockholders of record on December 31, 2011, payable on January 15, 2012. The market value of Penton Corporation stock was $15 per share on December 15 and $16 per share on December 31. Net income for 2011 was $500,000.
Instructions
(1)Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.
(2)Prepare the stockholders' equity section of the balance sheet for Penton Corporation at December 31, 2011.
Ex. 278
On January 1, 2011, Dolan Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:
Mar.1Issued 25,000 shares of common stock for $400,000.
June1Declared a cash dividend of $2.00 per share to stockholders of record on June 15.
June30Paid the $2.00 cash dividend.
Dec.1Purchased 5,000 shares of common stock for the treasury for $22 per share.
Dec.15Declared a cash dividend on outstanding shares of $2.25 per share to stockholders of record on December 31.
Instructions
Prepare journal entries to record the above transactions.
Ex. 279
Record the following transactions for Grogan Corporation on the dates indicated.
1.On March 31, 2011, Grogan Corporation discovered that Depreciation Expense on factory equipment for the year ended December 31, 2010, had been recorded twice, for a total amount of $70,000 instead of the correct amount of $35,000.
2.On June 30, 2011, the company's internal auditors discovered that the April 2011 telephone bill for $2,500 had erroneously been charged to the Interest Expense account.
3.On August 14, 2011, cash dividends on preferred stock of $110,000 declared on July 1, 2011, were paid.