Assignment

I. Newly formed S&J Iron Corporation has 133,000 shares of $4 par common stock authorized. On March 1, 2016, S&J Iron issued 9,000 shares of the stock for $9 per share. On May 2 the company issued an additional 18,500 shares for $20 per share. S&J Iron was not affected by other events during 2016.

Required:

a. Record the transactions in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event.

b. Determine the amount S&J Iron would report for common stock on the December 31, 2016, balance sheet.

c. Determine the amount S&J Iron would report for paid-in capital in excess of par.

d. What is the total amount of capital contributed by the owners?

e. What amount of total assets would S&J Iron report on the December 31, 2016, balance sheet?

f. Prepare journal entries to record the March 1 and May 2 transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field)

1. Record the issue of common stock.
2. Record the issue of additional common stock.

II. Eastport Inc. was organized on June 5, 2016. It was authorized to issue 410,000 shares of $10 par common stock and 40,000 shares of 4 percent cumulative class A preferred stock. The class A stock had a stated value of $25 per share. The following stock transactions pertain to Eastport Inc.:

1. Issued 17,000 shares of common stock for $15 per share.
2. Issued 6,000 shares of the class A preferred stock for $30 per share.
3. Issued 52,000 shares of common stock for $18 per share.

Required

a. Prepare general journal entries for these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Issued 17,000 shares of common stock for $15 per share.
2. Issued 6,000 shares of the class A preferred stock for $30 per share.
3. Issued 52,000 shares of common stock for $18 per share.

Prepare the stockholders' equity section of the balance sheet immediately after these transactions.

III. Mercury Corporation issued 8,000 shares of no-par common stock for $20 per share. Mercury also issued 1,200 shares of $30 par, 6 percent noncumulative preferred stock at $40 per share.

Required

a. Record these events in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event.

1. Record the issue of common stock.
2. Record the issue of preferred stock.

IV. Elroy Corporation repurchased 1,700 shares of its own stock for $30 per share. The stock has a par of $10 per share. A month later Elroy resold 425 shares of the treasury stock for $38 per share.

Required

a. Record the two events in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the repurchase of own stock.
2. Record the sale of repurchased stock

What is the balance of the treasury stock account after these transactions?

V. The following information pertains to JAE Corp. at January 1, 2016:

Common stock, $9 par, 9,000 shares authorized, 1,800 shares issued and outstanding$16,200
Paid-in capital in excess of par, common stock 13,100
Retained earnings 69,000

JAE Corp. completed the following transactions during 2016:

1. Issued 800 shares of $9 par common stock for $29 per share.
2. Repurchased 190 shares of its own common stock for $26 per share.
3. Resold 50 shares of treasury stock for $27 per share.

Required

a. How many shares of common stock were outstanding at the end of the period?
b. How many shares of common stock had been issued at the end of the period?
c. Prepare journal entries for these transactions and post them to T-accounts.

1. Issued 800 shares of $9 par common stock for $29 per share.
2. Repurchased 190 shares of its own common stock for $26 per share.
3. Resold 50 shares of treasury stock for $27 per share.

VI. The following correctly prepared entries without explanations pertain to Corners Corporation:

Account Title   Debit   Credit
1. Cash   1,125,000       
    Common Stock      650,000
    Paid-in Capital in Excess of Par Value      475,000
2. Treasury Stock   21,200       
    Cash      21,200
3. Cash   20,000       
    Treasury Stock      16,400
    Paid-in Capital in Excess of Cost of Treasury Stock      3,600

The original sale (Entry 1) was for 450,000 shares, and the treasury stock was acquired for $4 per share (Entry 2).

Required

a. What was the sales price per share of the original stock issue?

b. How many shares of stock did the corporation acquire in Entry 2?

c. How many shares were reissued in Entry 3?

d. How many shares are outstanding immediately following Entries 2 and 3, respectively?