Problem 1
On January 1, 2014, Everett Corporation had these stockholders' equity accounts.
Common Stock ($10 par value, 86,400 shares issued and outstanding) $864,000
Paid-in Capital in Excess of Par Value 511,500
Retained Earnings 677,300
During the year, the following transactions occurred.
Jan. 15 Declared a $0.60 cash dividend per share to stockholders of record on January 31, payable February 15.
Feb. 15 Paid the dividend declared in January.
Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $14 per share.
May 15 Issued the shares for the stock dividend.
Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2015.
Dec. 31 Determined that net income for the year was $383,800.
•Journalize the transactions
•Enter the beginning balances and post the entries to the stockholders' equity T-accounts.
•Prepare the stockholders' equity section of the balance sheet at December 31.
•Calculate the payout ratio and return on common stockholders' equity.
Problem 2
Pringle Corporation has been authorized to issue 19,100 shares of $100 par value, 9%, noncumulative preferred stock and 1,129,400 shares of no-par common stock.
The corporation assigned a $4 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders' equity.
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Preferred Stock
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$152,900
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Paid-in Capital in Excess of Par Value-Preferred Stock
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22,920
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Common Stock
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2,230,000
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Paid-in Capital in Excess of Stated Value-Common Stock
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1,548,000
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Treasury Stock- (5,000 common shares)
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40,000
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Retained Earnings
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84,300
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The preferred stock was issued for $175,820 cash. All common stock issued was for cash. In November 5,000 shares of common stock were purchased for the treasury at a per share cost of $8. No dividends were declared in 2014.
•Prepare the journal entries for the following.
(1) Issuance of preferred stock for cash.
(2) Issuance of common stock for cash.
(3) Purchase of common treasury stock for cash.
•Prepare the stockholders' equity section of the balance sheet at December 31, 2014.
Attached the problems in detail:
Attachment:- Problems.rar