Question

In: Accounting

a. Chile Co. has 1,000 shares of 8%, $50 par value,cumulative preferred stock and 50,000...

a. Chile Co. has 1,000 shares of 8%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2016. In 2016, $10,000 of dividends are declared and paid. No dividends were paid in2015. What are the dividends received by the common stockholders in 2016?

b. The entry to record the full payment of the premium on a two-year insurance policy would be:

-debit to prepaid insurance, credit to accounts receivable

-debit to prepaid insurance, credit to cash

-debit to insurance expense, credit to cash

-debit to prepaid insurance, credit to accounts payable

c. JC, Inc. acquired a piece of machinery on January 3, 2016.

The following are the details on the machine:
Cost:   $68,400
Life: 100,000 units
Salvage (Residual) Value:    $11,600.

d. Acme Co. began the year with $4,200 in supplies and purchased $7,500 in supplies during the year. At the year end, $3,100 in supplied remained on hand. The required adjusting entry would be:

JC uses the units-of-production method of depreciation. Assuming the machine produced 18,500 units during the year ended December 31, 2016, the 2016 depreciation expense was:

-Debit, Supplies Expense for $3,100
Credit, Supplies for $3,100

-Debit, Supplies Expense for $8,600
Credit, Supplies for $8,600

-Debit, Supplies for $3,100
Credit, Cash for $3,100

-Debit, Supplies for $8,600
Credit, Accounts Payable for $8,600

Solutions

Expert Solution

Cumm. Pref. Shares are those shares whose dividend get collected till they are paid.

Pref. Dividend in 2015 = $4,000 {$8%* ($50* 1,000)}

Pref. Dividend in 2016 = $4,000

Dividend declared in 2016 = 10,000

Pref Dividend = $8,000 (4,000 + 4,000)

Equity Dividend = $2,000 (10,000 – 8,000)

Prepaid Insurance (Dr.)

Cash (Cr.)

Option B is correct.

Depreciation = (Cost – Salvage Value) / Total No. of Units produced in Life * Units produced in 2016

= (68,400 – 11,600) / 100,000 * 18,500 Units

Depreciation for 2016 = $10,508

Supplies Expense = Opening + Purchased – Closing

= $4,200 + 7,500 – 3,100

Supplies Expense = $8,600

Entry:

Supplies Expense (Dr.) $8,600

Supplies (Cr.) $8,600

Option B is correct

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

1. Cuther Inc., has 1,000 shares of 8%, $50 par value, cumulative preferred stock and 50,000...

1. Cuther Inc., has 1,000 shares of 8%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2007, and December 31, 2008. The board of directors declared and paid a $3,000 dividend in 2007. In 2008, $12,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2008? a. $7,000 c. $5,000 d. $4,000

Sandpiper company has 10,000 shares of cumulative preferred 2% stock, $50 par and 50,000 shares a...

Sandpiper company has 10,000 shares of cumulative preferred 2% stock, $50 par and 50,000 shares a $15 par common stock. the following amounts were distributed as dividends year 1. 20,000 year 2. 8000 year 3. 30000 preferred stock. common stock dividends per share. dividends per share year 1 year 2 year 3

Seacrest Company has 10,000 shares of cumulative preferred 2% stock, $50 par and 50,000 shares of...

Seacrest Company has 10,000 shares of cumulative preferred 2% stock, $50 par and 50,000 shares of $10 par common stock. The following amounts were distributed as dividends: Year 1 $20,000 Year 2 5,000 Year 3 30,000 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'. Preferred Stock (dividend per share) Common Stock (dividend per share) Year 1 $ $ Year 2 $...

Last Inc., has 2,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares...

Last Inc., has 2,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2013, and December 31, 2012. The board of directors declared and paid a $5,000 dividend in 2012. In 2013, $24,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2013?

Sandpiper Company has 25,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of...

Sandpiper Company has 25,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of $25 par common stock. The following amounts were distributed as dividends: 20Y1 $150,000 20Y2 30,000 20Y3 225,000 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

Oceanic Company has 25,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of...

Oceanic Company has 25,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $30 par common stock. The following amounts were distributed as dividends: Year 1 - $50,000, Year 2 - $12,500, Year 3 - $75,000. Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

Sandpiper Company has 15,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of...

Sandpiper Company has 15,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of $30 par common stock. The following amounts were distributed as dividends: Year 1 $67,500 Year 2 36,000 Year 3 135,000 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'. Year 1 Year 2 Year 3 Preferred stock (Dividends per share) $ $ $ Common stock (Dividends...

Sandpiper Company has 15,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of...

Sandpiper Company has 15,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends: Year 1 $37,500 Year 2 12,000 Year 3 45,000 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'. Year 1 Year 2 Year 3 Preferred stock (Dividends per share) $ $ $ Common stock (Dividends...

The Scott Corporation has outstanding 10,000 shares of 10%, $50 par value, cumulative, nonparticipating preferred stock...

The Scott Corporation has outstanding 10,000 shares of 10%, $50 par value, cumulative, nonparticipating preferred stock and 80,000 shares of $10 par value common stock. The board of directors voted to distribute $45,000 as dividends in 2017, $65,000 in 2018, and $85,000 in 2019. Compute the amounts below. Total dividend paid to preferred stockholders in 2017. _____ Total dividend paid to common stockholders in 2017. _____ Total dividend paid to preferred stockholders in 2018. _____ Total dividend paid to...

The Jumping Jungle has 40,000 shares of $50 par, 2% cumulative preferred stock and 100,000 shares...

The Jumping Jungle has 40,000 shares of $50 par, 2% cumulative preferred stock and 100,000 shares of $25 par common stock. The following amounts were distributed as dividends: Directions: Fill in the missing blanks in the table below. Year 1 Year 2 Year 3 Amount distributed $15,000 $25,000 $120,000 Preferred dividend (40,000 shares) Common dividend (100,000 shares) Dividends per share: Preferred stock Common stock (Current year preferred dividend in arrears)

Subjects