Acc291 Principles of Accounting: Week 4 Assignments (E12-2, E12-8, E12-10, P12-2A)

Acc291 Principles of Accounting

Week 4 Individual Assignments



E12-2

Garza Co. had the following transactions during the current period.

Mar. 2 Issued 5,000 shares of $1 par value common stock to attorneys in payment of a bill for $30,000 for services provided in helping the company to incorporate.

June 12 Issued 60,000 shares of $1 par value common stock for cash of $375,000.

July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.

Nov. 28 Purchased 2,000 shares of treasury stock for $80,000.



Instructions

Journalize the transactions.



E12-8

On January 1, Armada Corporation had 95,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred.

Apr. 1 Issued 15,000 additional shares of common stock for $17 per share.

June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.

July 10 Paid the $1 cash dividend.

Dec. 1 Issued 2,000 additional shares of common stock for $19 per share.

Dec. 15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of record on December 31.



Instructions

(a) Prepare the entries, if any, on each of the three dividend dates.

(b) How are dividends and dividends payable reported in the financial statements prepared at December 31?



E12-10

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, outstanding shares, and book value per share.

Use the following column headings: Before Action, After Stock Dividend, and After Stock Split.



P12-2A

Greeve Corporation had the following stockholders' equity accounts on January 1, 2006:

Common Stock ($1 par) $400,000, Paid-in Capital in Excess of Par Value $500,000, and Retained Earnings $100,000. In 2006, the company had the following treasury stock transactions.

Mar. 1 Purchased 5,000 shares at $7 per share.

June 1 Sold 1,000 shares at $10 per share.

Sept. 1 Sold 2,000 shares at $9 per share.

Dec. 1 Sold 1,000 shares at $5 per share.

Greeve Corporation uses the cost method of accounting for treasury stock. In 2006, the company reported net income of $60,000.



Instructions

(a) Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2006, for net income.

(b) Open accounts for (1) Paid-in Capital from Treasury Stock, (2) Treasury Stock, and (3) Retained Earnings. Post to these accounts using J12 as the posting reference.

(c) Prepare the stockholders' equity section for Greeve Corporation at December 31, 2006.

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