Question

In: Accounting

The following shareholders' equity accounts are reported by Cullumber Inc. on January 1: Common shares (unlimited...

The following shareholders' equity accounts are reported by Cullumber Inc. on January 1:

Common shares (unlimited authorized, 171,000 issued) $2,736,000
Preferred shares ($4 cumulative, convertible, 100,000 authorized, 6,400 issued) 480,000
Contributed surplus—reacquisition of common shares 32,800
Retained earnings 1,274,000


The following selected transactions occurred during the year:

Feb. 11 Issued 57,000 common shares at $20 per share.
Mar. 2 Reacquired 20,900 common shares at $22 per share.
June 14 Split the common shares 2 for 1 when the common shares were trading at $30 per share.
July 25 Reacquired 520 preferred shares at $70 per share.
Sept. 16 Reacquired 57,000 common shares for $17 per share.
Oct. 27 Declared a 5% common stock dividend distributable on December 13 to shareholders of record on November 24. The fair value of the common shares on October 27 was $19 per share.
Dec. 13 Distributed the stock dividend declared on October 27. The fair value of the common shares on December 13 was $21 per share.

(a)

Prepare journal entries for the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round average per share to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,276.)

Date

Account Titles and Explanation

Debit

Credit

(Issued common shares for cash.)

Mar. 2

(To record reacquisition of
common shares.)
(To record reacquisition of
preferred shares.)

Sept. 16

(To record reacquisition of
common shares.)
(To record declaration of
stock dividend.)
(To record distribution of
stock dividend.)

Solutions

Expert Solution

Date Account Titles and Explanation Debit Credit
Feb 11 Cash    1,140,000 (57,000 x $20)
Common Share    1,140,000
Mar 2 Common Share       355,300 (20,900 x $17)
Contributed Surplus—Reacquisition of Common Shares        32,800
Retained Earnings        71,700
Cash      459,800 (20,900 x $22)
June 14 No Entry Required               -  
No Entry Required              -  
July 25 Preferred Shares        39,000 (520 x $75)
Contributed Surplus—Reacquisition of Preferred Shares          2,600
Cash        36,400 (520 x $70)
Sep 16 Common Share       484,500 (57,000 x $8.50)
Retained Earnings       484,500
Cash      969,000 (57,000 x $17)
Oct 27 Stock Dividends       393,490 (20,710 x $19)
Stock Dividends Distributable      393,490
Dec 13 Stock Dividends Distributable       393,490
Common Share      393,490
Working
                                                                       171,000 $2,736,000 $16.00
                                                                        57,000 $1,140,000 $20.00
                                                                       228,000 $3,876,000 $17.00
                                                                       (20,900) -$355,300 $17.00
                                                                       207,100 $3,520,700 $17.00
                                                                       207,100 $0 $0.00
                                                                       414,200 $3,520,700 $8.50
                                                                        20,710

Related Solutions

The following shareholders' equity accounts are reported by Ivanhoe Inc. on January 1: Common shares (unlimited...
The following shareholders' equity accounts are reported by Ivanhoe Inc. on January 1: Common shares (unlimited authorized, 132,500 issued) $1,855,000 Preferred shares ($4 cumulative, convertible, 100,000 authorized, 4,300 issued) 322,500 Contributed surplus—reacquisition of common shares 28,600 Retained earnings 1,253,000 The following selected transactions occurred during the year: Feb. 11 Issued 46,500 common shares at $19 per share. Mar. 2 Reacquired 18,800 common shares at $21 per share. June 14 Split the common shares 2 for 1 when the common shares...
The following shareholders' equity accounts are reported by Pharoah Inc. on January 1: Common shares (unlimited authorized,...
The following shareholders' equity accounts are reported by Pharoah Inc. on January 1: Common shares (unlimited authorized, 142,500 issued) $2,280,000 Preferred shares ($4 cumulative, convertible, 100,000 authorized, 4,500 issued) 337,500 Contributed surplus-reacquisition of common shares 29,000 Retained earnings 1,255,000 The following selected transactions occurred during the year: Feb. 11 Issued 47,500 common shares at $20 per share.Mar. 2 Reacquired 19,000 common shares at $22 per share. June 14 Split the common shares 2 for 1 when the common shares were trading at $30 per share. July 25 Reacquired 330...
On January 1, 2017, Conway Ltd. had the following shareholders' equity accounts: Common shares, unlimited number...
On January 1, 2017, Conway Ltd. had the following shareholders' equity accounts: Common shares, unlimited number of shares authorized, 1.5 million issued - $1,650,000 Retained earnings- 550,000 It was also authorized to issue an unlimited number of $6 noncumulative preferred shares. During 2017, the corporation had the following transactions and events related to its shareholders' equity: Jan 2 Issued 100,000 preferred shares at $66 per share March 31 Paid quarterly dividend to preferred shareholders April 18 Issued 250,000 common shares...
ABC Corporation had the following shareholders’ equity balances at January 1, 2020: Common shares, unlimited authorized,...
ABC Corporation had the following shareholders’ equity balances at January 1, 2020: Common shares, unlimited authorized, 400,000 issued                                       $800,000 Retained earnings                                                                                             120,000                      Accumulated other comprehensive income                                                                30,000 The following events occurred in 2020: Issued 50,000 common shares for $150,000 cash. Declared and paid cash dividends of $25,000. Reported net income of $40,000. Reported other comprehensive income of $10,000. At the end of the year, the fair market value of common shares was $5/share. Completed a 2:1 stock-split. Required: Prepare...
Stellar Corp. had the following shareholders’ equity on January 1, 2017: Common shares, unlimited number authorized,...
Stellar Corp. had the following shareholders’ equity on January 1, 2017: Common shares, unlimited number authorized, 100,000 shares issued and outstanding $ 290,000 Contributed surplus 309,000 Retained earnings 2,400,000 Total shareholders’ equity $ 2,999,000 The contributed surplus arose from net excess of proceeds over cost on a previous cancellation of common shares. Stellar prepares financial statements in accordance with ASPE. The following transactions occurred, in the order given, during 2017. 1. Subscriptions were sold for 10,700 common shares at $22...
Sandhill Technologies Inc. reported the following information related to its shareholders’ equity on January 1: Common...
Sandhill Technologies Inc. reported the following information related to its shareholders’ equity on January 1: Common shares, 1,200,000 authorized, 600,000 shares issued $1,800,000 Contributed surplus—reacquisition of common shares 14,160 Retained earnings 714,000 During the year, the following transactions related to common shares occurred in the order listed: 1. Issued 38,000 shares at $4.00 per share. 2. Reacquired 10,800 shares at $3.00 per share. 3. Issued 4,900 shares at $4.60 per share. 4. Reacquired 18,900 shares at $4 per share. 5....
Sandhill Technologies Inc. reported the following information related to its shareholders’ equity on January 1: Common...
Sandhill Technologies Inc. reported the following information related to its shareholders’ equity on January 1: Common shares, 1,200,000 authorized, 600,000 shares issued $1,800,000 Contributed surplus—reacquisition of common shares 14,160 Retained earnings 714,000 During the year, the following transactions related to common shares occurred in the order listed: 1. Issued 38,000 shares at $4.00 per share. 2. Reacquired 10,800 shares at $3.00 per share. 3. Issued 4,900 shares at $4.60 per share. 4. Reacquired 18,900 shares at $4 per share. 5....
On January 1, 2016, Fascom had the following account balances in its shareholders' equity accounts.   Common...
On January 1, 2016, Fascom had the following account balances in its shareholders' equity accounts.   Common stock, $1 par, 247,000 shares issued 247,000   Paid-in capital - excess of par, common 494,000   Paid-in capital - excess of par, preferred 165,000   Preferred stock, $100 par, 16,500 shares outstanding 1,650,000   Retained earnings 3,300,000   Treasury stock, at cost, 4,700 shares 23,500 During 2016, Fascom Inc. had several transactions relating to common stock. January 15: Declared a property dividend of 100,000 shares of Slowdown Company...
On January 1, 2021, Fascom had the following account balances in its shareholders' equity accounts. Common...
On January 1, 2021, Fascom had the following account balances in its shareholders' equity accounts. Common stock, $1 par, 253,000 shares issued $ 253,000 Paid-in capital–excess of par, common 506,000 Paid-in capital–excess of par, preferred 115,000 Preferred stock, $100 par, 11,500 shares outstanding 1,150,000 Retained earnings 2,300,000 Treasury stock, at cost, 5,300 shares 26,500 During 2021, Fascom Inc. had several transactions relating to common stock. January 15: Declared a property dividend of 100,000 shares of Slowdown Company (book value $10.3...
On January 1, 2017, Fascom had the following account balances in its shareholders' equity accounts. Common...
On January 1, 2017, Fascom had the following account balances in its shareholders' equity accounts. Common stock, $1 par, 250,000 shares issued 250,000 Paid-in capital–excess of par, common 500,000 Paid-in capital–excess of par, preferred 100,000 Preferred stock, $100 par, 10,000 shares issued 1,000,000 Retained earnings 2,000,000 Treasury stock, at cost, 5,000 shares 25,000 During 2017, Fascom Inc. had several transactions relating to common stock. January 15: Bought for retirement 10,000 common shares at $ 5 per share. February 17: Sold...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT