Question

In: Accounting

the beginning of 2020, Browne Corporation had the following stockholders’ equity balances in its general ledger:...

the beginning of 2020, Browne Corporation had the following stockholders’ equity balances in its general ledger:

Common Stock, $10 Par Value $500,000

Paid-In Capital in Excess of Par 1,500,000

In Capital, Treasury Stock 100,000

Paid-In Capital, Stock Options 80,000

Retained Earnings 100,000

Treasury Stock (15,000 shares) (270000)

Total Stockholders’ Equity 2,010,000

The paid-in capital from stock options relates to options granted on 1/1/16 to the CEO as incentive compensation. As of 1/1/20, the remaining expected benefit period is three years; expense has been and will be recorded evenly over the benefit period.

January 2: Purchased 10,000 shares of its common stock for $16 per share. Browne uses the cost method of accounting for treasury stock transactions.

February 1: Declared and distributed a 30% stock dividend on common stock outstanding when the market price of the stock was $24 per share.

April 1: Issued 20,000 shares of $50 par, noncumulative, convertible 6% preferred stock for $60 per share, where one share of preferred stock is convertible into two shares of common stock.

July 1: 2,000 shares of treasury stock that had been purchased in a prior year for $22 per share were re-issued for $20 per share.

August 1: Holders of 8,000 shares of the preferred stock converted their shares into common stock when the market value of the common stock was $22 per share. Taylor uses the book value method of accounting for conversions.

October 1: Declared and paid a cash dividend of $2 per share on the outstanding common stock.

November 1: investors used ten percent of the outstanding stock option to purchase 1,000 common share. Brown received $25,000 from investors

December 1: Declared and distributed a property dividend of land to preferred shareholders. The land had a fair value of $75,000 and a carrying value of $60,000.

December 31: Recorded 2020 compensation expense related to the stock options.

The 2020 Final Net Income, including the effects of any net income items listed above (and the 2020 tax effects on net income items), was $1,000,000. There were 500,000 shares authorized for both preferred and common stock. Required All journal entries for the item above 12/30/20 stockholders equity section

Required All journal entries for the item above

12/30/20 stockholders equity section

Expert Solution

	Journal entries
2-Jan	Treasury stock	160000
	Cash		160000
	(10000*$16)

1-Feb	Retained Earnings	180000
	Common stock		75000
	Paid-In Capital in Excess of Par -Common stock(24-10)*7500 shares)		105000
	(500000/10=50000shares-Treasury stock(15000+10000)=25000
	(stock dividend- 30%25000 $ 10 par value)

Apr.1	Cash(20000*60)	1200000
	6% Preferred stock(20000*50)		1000000
	Paid-In Capital in Excess of Par-Preferred stock(20000*(60-50))		200000

1-Jul	Cash(2000*20)	40000
	Paid-in capital-treasury stock(2000*(22-20))	4000
	Trasury stock(2000*22)		44000

1-Aug	Preferred stock(8000*50)	400000
	Paid-In Capital in Excess of Par-Preferred stock(8000*(60-50))	80000
	Common stock(8000210)		160000
	Paid-In Capital in Excess of Par -Common stock(bal.fig.)		320000


Oct.1	Retained Earnings	97000
	Cash		97000
	(25000+7500+16000)=48500 shares*$ 2

Nov. 1	Paid-In Capital, Stock Options	25000
	Common stock(1000*10)		10000
	Paid-In Capital in Excess of Par -Common stock(bal.fig.)		15000


1-Dec	Retained earnings	75000
	Land		75000



31-Dec	Retained Earnings-Compensation expense	20000
	Paid-In Capital, Stock Options		20000
	(80000/4 yrs.)

	Income summary	1000000
	Retained earnings		1000000

	Partial Ledger Posting:			Net Ledger balances
		Debit	Credit	Debit	Credit
	6% Preferred stock(20000*50)		1000000
1-Aug	Preferred stock(8000*50)	400000			600000

	Cash		160000
	Cash		97000
1-Jul	Cash(2000*20)	40000
Apr.1	Cash(20000*60)	1200000		983000


	Op. bal.		500000
	Common stock		75000
	Common stock(1000*10)		10000
	Common stock(8000210)		160000		745000


	Income summary	1000000		1000000


	Land		75000		75000

	Op.Bal.		1500000
	Paid-In Capital in Excess of Par -Common stock(24-10)*7500 shares)		105000
	Paid-In Capital in Excess of Par -Common stock(bal.fig.)		320000
	Paid-In Capital in Excess of Par -Common stock(bal.fig.)		15000		1940000


	Paid-In Capital in Excess of Par-Preferred stock(20000*(60-50))		200000
	Paid-In Capital in Excess of Par-Preferred stock(8000*(60-50))	80000			120000

	Op.bal.		80000
Nov. 1	Paid-In Capital, Stock Options	25000
	Paid-In Capital, Stock Options		20000
					75000

	Op.bal.		100000
	Paid-in capital-treasury stock(2000*(22-20))	4000			96000





	Op. bal.		100000
1-Feb	Retained Earnings	180000
Oct.1	Retained Earnings	97000
1-Dec	Retained earnings	75000
	Retained earnings		1000000
31-Dec	Retained Earnings-Compensation expense	20000			728000

	Op.bal.	270000
	Treasury stock(2000*22)		44000
2-Jan	Treasury stock	160000		386000
		3551000	5561000	2369000	4379000

2010000 2010000

Stockholders' Equity Section as at Dec 31, 2020
Common Stock, $10 Par Value	745000
Paid-In Capital in Excess of Par	1940000
6% Preferred stock	600000
Paid-In Capital in Excess of Par-Preferred stock	120000
In Capital, Treasury Stock	96000
Paid-In Capital, Stock Options	75000
Retained Earnings	728000
Treasury Stock	-386000
Total Stockholders’ Equity	3918000

ekkarill92 answered 2 years ago

At the beginning of 2020, Braun Corporation had the following stockholders’ equity balances in its general...

At the beginning of 2020, Braun Corporation had the following stockholders’ equity balances in its general ledger: Common Stock, $10 Par Value $400,000 Paid-In Capital in Excess of Par: Common $600,000 Paid-In Capital, Treasury Stock $5,000 Paid-In Capital, Stock Options $200,000 Retained Earnings $1,200,000 Treasury Stock (5,000 shares) $(100,000) _____________________________________ Total Stockholders’ Equity $2,305,000 The paid-in capital from stock options relates to options granted on 1/1/12 to the CEO as incentive compensation. As of 1/1/20, the remaining expected...

At the beginning of 2020, Brown Corporation had the following stockholders’ equity balances in its general...

At the beginning of 2020, Brown Corporation had the following stockholders’ equity balances in its general ledger: Common Stock, $10 Par Value $2,500,000 Paid-In Capital in Excess of Par: Common 1,500,000 Paid-In Capital, Treasury Stock 10,000 Paid-In Capital, Stock Options 40,000 Retained Earnings 3,000,000 Treasury Stock (10,000 shares) (180,000) Total Stockholders’ Equity $6,870,000 The paid-in capital from stock options relates to options granted on 1/1/18 to the CEO as incentive compensation. As of 1/1/20, the remaining expected benefit period is...

At the beginning of 2015, Tyler Corporation had the following stockholders’ equity balances in its general...

At the beginning of 2015, Tyler Corporation had the following stockholders’ equity balances in its general ledger: Common Stock, $10 Par Value $2,500,000 Paid-In Capital in Excess of Par 1,500,000 Paid-In Capital, Treasury Stock 450,000 Paid-In Capital, Stock Options 200,000 Retained Earnings 5,000,000 Treasury Stock (15,000 shares) (300,000) Total Stockholders’ Equity $9,350,000 The paid-in capital from stock options relates to options granted on 1/1/07 to the CEO as incentive compensation. As of 1/1/15, the remaining expected benefit period is four...

Carl Corporation has the following beginning balances in its stockholders’ equity accounts on January 1: Common...

Carl Corporation has the following beginning balances in its stockholders’ equity accounts on January 1: Common Stock ($1 Par), $15,000; Additional Paid-in Capital, $675,000; and Retained Earnings, $200,000. Carl has the following transactions affecting stockholders’ equity in the year. March 1 Issues 6,000 additional shares of $1 par value common stock for $50 per share. May 10 Repurchases 1,000 shares of treasury stock for $58 per share. June 21 Reissues 500 shares of treasury stock purchased on May 10 for...

On January 1, 2020, Bronson Corporation had the following information available regarding its stockholders' equity: 4%,...

On January 1, 2020, Bronson Corporation had the following information available regarding its stockholders' equity: 4%, $50 par, cumulative Preferred Stock, 300,000 shares authorized 9,000,000 $ Paid-in Capital in Excess of Par - Preferred Stock 1,440,000 Common Stock, $3 par, 1,000,000 shares authorized, 530,000 shares issued, ? 510,000 shares outstanding Paid-in Capital in Excess of Par - Common Stock 4,770,000 Paid-in Capital from Treasury Stock Transactions 55,000 Treasury Stock (held at cost) 180,000 Retained Earnings 17,210,000 The following transactions affecting...

Stockholders' Equity Section of Balance Sheet The following accounts and their balances appear in the ledger...

Stockholders' Equity Section of Balance Sheet The following accounts and their balances appear in the ledger of Goodale Properties Inc. on June 30 of the current year: Common Stock, $15 par $792,000 Paid-In Capital from Sale of Treasury Stock 32,500 Paid-In Capital in Excess of Par—Common Stock 21,120 Retained Earnings 1,243,000 Treasury Stock 16,340 Prepare the Stockholders’ Equity section of the balance sheet as of June 30 using Method 1 of Exhibit 8. Eighty thousand shares of common stockare authorized,...

The Coldwater Corporation has the following accounts in its stockholders’ equity section at the beginning of...

The Coldwater Corporation has the following accounts in its stockholders’ equity section at the beginning of 2013: Preferred stock, $50 par value, 7% cumulative and nonparticipating, 5,000 shares ........................$ 250,000 Common Stock, $1 par value, 100,000 shares authorized. 50,000 shares outstanding ...................... 50,000 Paid-in Capital in Excess of Par – Common ..................................................................... 550,000 Paid-in Capital in Excess of Par – Preferred ..................................................................... 25,000 Retained Earnings ................................................................................................. $2,300,000 During 2013, Coldwater Corp. declared and distributed the following dividends in the order...

Mana Inc. had the following balances in its shareholders' equity at the beginning of the current...

Mana Inc. had the following balances in its shareholders' equity at the beginning of the current year (January 1, 2021): Preferred shares ($ 1.50, cumulative*, 100,000 shares authorized, 5,000 shares issued) .................................................... $ 25,000 Common shares unlimited shares authorized, 8,000 shares issued ................ 160,000 Retained earnings............................................................................................... 92,000 Total shareholders' equity ................................................................................. $ 277,000 *two years of dividends are in arrears. During the year ended December 31, 2021, the following transactions took place: 1. On January 1, issued 9,000 common shares...

The following account balances at the beginning of January were selected from the general ledger of...

The following account balances at the beginning of January were selected from the general ledger of Ocean City Manufacturing? Company: Work in process inventory ?$0 Raw materials inventory $ 28 comma 200$28,200 Finished goods inventory $ 40 comma 000$40,000 Additional? data: 1. Actual manufacturing overhead for January amounted to $ 65 comma 500$65,500. 2. Total direct labor cost for January was $ 63 comma 400$63,400. 3. The predetermined manufacturing overhead rate is based on direct labor cost. The budget for...

Donald’s Juice Shop had the following balances in its ledger at 30 June 2020. Account Amount...

Donald’s Juice Shop had the following balances in its ledger at 30 June 2020. Account Amount ($) Cash at Bank $48 724 Accounts Receivable $2 05 056 Inventory $2 91 200 Prepaid Insurance $15 744 Office Supplies on Hand $8 736 Furniture & Fixtures $1 06 080 Accumulated Depreciation – Furniture & Fittings $29 120 Delivery Equipment $1 24 800 Accumulated Depreciation – Delivery Equipment $49 920 Accounts Payable $72 072 Loan Payable $3 12 000 Donald, Capital $1 32...