Equity and Investments

Jul 7th, 2014
DotaCN
Category:
Accounting
Price: $20 USD

Question description

Resources: Ch. 11 & 12 of Financial Accounting

Complete Exercises E11-15, E12-1, & E12-2.

Complete Problem 11-6A.

Submit as a Microsoft® Excel® or Word document.

E11-15 On October 31, the stockholders’ equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.

Instructions

Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity and outstanding shares. Use the following column headings: Before Action, After Stock Dividend, and After Stock Split.

BE12-1 Coffey Corporation purchased debt investments for $52,000 on January 1, 2011. On July 1, 2011, Coffey received cash interest of $2,340. Journalize the purchase and the receipt of interest. Assume that no interest has been accrued.

BE12-2  On August 1,Wade Company buys 1,000 shares of Morgan common stock for $35,000 cash, plus brokerage fees of $700. On December 1,Wade sells the stock investments for $40,000 in cash. Journalize the purchase and sale of the common stock.

P11-6A Arnold Corporation has been authorized to issue 40,000 shares of $100 par value, 8%, noncumulative preferred stock and 2,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2011, the ledger contained the following balances pertaining to stockholders’ equity.

Preferred Stock                                                                         $ 240,000 

Paid-in Capital in Excess of Par Value—Preferred                       56,000

Common Stock                                                                         2,000,000

Paid-in Capital in Excess of Stated Value—Common              5,700,000

Treasury Stock—Common (1,000 shares)                                    22,000

Paid-in Capital from Treasury Stock                                                 3,000

Retained Earnings                                                                         560,000

The preferred stock was issued for land having a fair market value of $296,000.All common stock issued was for cash. In November, 1,500 shares of common stock were purchased for the treasury at a per share cost of $22. In December, 500 shares of treasury stock were sold for $28 per share.  No dividends were declared in 2011.

Instructions

(a) Prepare the journal entries for the:

            (1) Issuance of preferred stock for land.

            (2) Issuance of common stock for cash.

            (3) Purchase of common treasury stock for cash.

            (4) Sale of treasury stock for cash.

(b) Prepare the stockholders’ equity section at December 31, 2011.


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: New York University
PREMIUM TUTOR

Studypool has helped 1,244,100 students

8 Reviews


Summary
Quality
Communication
On Time
Value
kevin12622
Nov 30th, 2016
" Goes above and beyond expectations ! "
kiln82
Nov 21st, 2016
" awesome work thanks "
ashleyisgod
Nov 16th, 2016
" Top quality work from this guy! I'll be back! "
likeplum4
Nov 7th, 2016
" Excellent work as usual "
Molly_Moon
Oct 25th, 2016
" AMAZING as always! "
kpcutie
Oct 16th, 2016
" Excellent job "
Hemapathy
Oct 2nd, 2016
" all I can say is wow very fast work, great work thanks "
pmallory
Sep 23rd, 2016
" Totally impressed with results!! :-) "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1830 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors