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On May 1, 2019, X-oft Corporation (a new corporation) issued 100,000 shares of its common stock...

On May 1, 2019, X-oft Corporation (a new corporation) issued 100,000 shares of its common stock for $15 per share. The stock had a par value of $2 per share. (USE THE FOLLOWING INFORMATION FOR PARTS A-D ON THE HOMEWORK)

a) What is the journal entry to record the issuance of this stock?

b) What is the journal entry to record the issuance of this stock?

c) On October 11, 2019, X-oft Corporation purchased 10,000 shares of its own stock from existing shareholders for $12 per share. What is the entry to record the purchase of this stock?

d) On October 30, 2019, the Board of Directors for X-oft Corporation declared a $.25 per share dividend to be paid December 15, 2019, to all shareholders of record on November 30, 2019. What is the journal entry (if any) to record this event on October 30?

e) On November 30, 2019, the accountants for X-oft Corporation determined who owned the stock for the declared dividend of $.25 per share from October 30 above. What is the journal entry (if any) to record this event?

f)  On November 30, 2019, the accountants for X-oft Corporation determined who owned the stock for the declared dividend of $.25 per share from October 30 above. What is the journal entry (if any) to record this event?

g) Assume that the beginning balance in retained earnings in 2019 was $380,000 and 2019 net income was $47,000. Further assume that the transactions above were the only ones to affect owners’ equity. What is the ending balance of retained earnings at the end of 2019?

h) Calculate the following for X-oft Corporation at 12/31/10:

Number of common shares issued:

Number of common shares outstanding:

i) Assume that on January 15,2020, X-oft Corporation sold the 10,000 shares of Treasury Stock for $15/share. What is the journal entry to record this sale?

Solutions

Expert Solution

in $
Trans Date Accounts Title DR Cr
a May 1 2019 Cash (100000*15) $1500000
Common stock 200000
Paid in capital in excess of par-Common stock 1300000
b May 1 2019 Cash (100000*15) 1500000
Common stock 200000
Paid in capital in excess of par-Common stock 1300000
(being common stock issued at premium)
c Oct 11 2019 Treasury stock 120000
Cash (10000*12) 120000
d Oct 30 2019 Cash Dividend 22500
Dividend payable (100000-10000)*.25 22500
e Nov-30 No journal entry is required on record date
f Nov-30 No journal entry is required on record date
g Ending balance of retained earnings
380000+47000-22500 404500
h Number of common shares issued: 100000
Number of common shares outstanding: 90000
i Cash (10000*15) 150000
Treasury stock 120000
Paid in capital in excess of treasury stock 30000
If any doubt please comment

ekkarill92 answered 2 years ago
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