Question

In: Accounting

please show all the calcualtions, thanks! The xxx inc. had equity on December 31, 2015, as...

please show all the calcualtions, thanks!

The xxx inc. had equity on December 31, 2015, as follows:

Common shares, unlimited shares authorized,

            50,000 shares issued                                                                                       $250,000

Retained earnings                                                                                                         200,000

Able Corporation is authorized to issue 100,000 shares of $3 cumulative preferred shares.

The following transactions occurred during 2016:

Jan. 15    Issued 5,000 common shares in exchange for equipment valued at $ 35,000.

Feb. 15    The board of directors declared a 5% share dividend to shareholders of record on March 1, to be distributed on March 20. The shares were selling for $6 a share.

Mar. 20     Issued the share dividend.

Apr. 15     Issued 12,000 preferred shares for cash at $22 per share.

              

May 1       Declared total cash dividends of $62,000 toshareholders of record on May 20, payable June 1.

June 1       Paid the cash dividend.

Aug. 20 The board decided to split the common shares 4 for 1 effective September 1.

Sept. 1      Share split (4 for 1) executed.

Dec. 31   Earned a net income of $300,000 for the year. Closed the income summary   account.

REQUIRED:

1)   Journalize the above journal entries.

2)   Prepare a statement of changes in equity for2016.

3)   Prepare the balance sheet presentation of the equity as at December 31, 2016.

Solutions

Expert Solution

JOURNAL ENTRY
Date Account Title Debit Credit
Jan.15 Equipment $35,000
Common Shares $25,000 (5000*5)
Additional Paid up Capital-Common shares $10,000 (35000-25000)
(To record Issue of 5000 shares for $7 per share against equipment)
Feb15 Retained Earnings $                16,500 (0.05*(50000+5000)*$6)
Common share dividend distributable $    13,750 (0.05*(50000+5000)*$5)
Additional paid up capital-Common shares $      2,750 (16500-13750)
(To record 5% share dividend declared)
March 20 Common share dividend distributable $                13,750
Common Shares $    13,750
(To record issue of 2750 common share dividend) 2750
April 15 Cash $             264,000 (22*12000)
Preferred shares $    36,000 (3*12000)
Additional paid in capital-Preferred shares $ 228,000
(To record issue of 12000 preferred shares for $22 per share )
May1 Retained Earnings $62,000
Dividend payable $62,000
(To redord declaration of cash dividend)
June1 Dividend payable $62,000
Cash $62,000
(To record payment of dividend)
August 20 On August20 a 4-for-1 stock split was declared for the common stockholders of record as of September1.
Sep. 1 The stock split resulted in the number of issued and outstanding shares of common shares increasing from 57750=(55,000+2750) shares to 231000 shares."
Dec31 Summary Income Account $300,000
Retained earnings $300,000
(To record closure of Summary income account)
STATEMENT OF CHANGES IN EQUITY
Common Shares Additional paid in capital- common shares Preferred shares Additional paid in capital-preference shares Retained Earnings
Beginning balance $250,000 $0 $0 $0 $200,000
Addition during the year: $38,750 $12,750 $ 36,000 $    228,000 $221,500
Ending Balance $288,750 $12,750 $36,000 $228,000 $421,500
BALANCE SHEET
STOCKHOLDERS EQUITY
Preferred Stock: Authorised 100000 cumulative preferred shares of $3 each
Issued 12000 shares $                36,000
Common Shares, Unlimited shares authorized
Issued Common shares 57750 shares @ $1.25 par $288,750
Additional paid in capital -Prederred shares $228,000
Additional opaid in capital -Common shares $12,750
Retained Earning $421,500
Total Stockholders Equity $             987,000

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

On December 31, 2015, Sveva Inc. has total liabilities of $112,000 and total equity of $220,000....
On December 31, 2015, Sveva Inc. has total liabilities of $112,000 and total equity of $220,000. The company needs to raise additional funds through debt and equity. The company will issue 25,000 shares of common stock at $11.10 per share and in addition it intends to borrow as much as it can from Bank of Switzerville. Bank of Switzerville requires a maximum debt-to-asset ratio of 0.6. What is the maximum additional amount that Sveva can borrow after the additional stock...
Arthur, Inc., had 610,000 shares of common stock issued and outstanding on December 31, 2015. On...
Arthur, Inc., had 610,000 shares of common stock issued and outstanding on December 31, 2015. On July 1, 2016, an additional 40,000 shares of common stock were issued for cash. Arthur, Inc. also had unexercised stock options to purchase 32,000 shares of common stock at $15 per share outstanding at the beginning and end of 2016. The average market price of Arthur, Inc. common stock was $20 during 2016. How many shares that should be included in computing diluted earnings...
On December 31, 2015, Alpha had the following balances (all balances are normal): Accounts Amount Preferred...
On December 31, 2015, Alpha had the following balances (all balances are normal): Accounts Amount Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding) $1,000,000 Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding) $1,000,000 The following events occurred during 2015 and were not recorded: On January 1, Alpha declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share...
For the year ended December 31, 2015, Patsy Inc. had income from continuing operations of $1,500,000....
For the year ended December 31, 2015, Patsy Inc. had income from continuing operations of $1,500,000. During 2015, it disposed of its Calgary division at a loss before taxes of $125,000. Before the disposal, the division operated at a before-tax loss of $150,000 in 2014 and $175,000 in 2015. Patsy also had an unrealized gain in its Available-for-sale investments of $27,500 (net of tax). It accounts for its investments in accordance with IAS 39. Patsy had 50,000 outstanding common shares...
On December 31, 2015, Berclair Inc. had 600 million shares of common stock and 17 million...
On December 31, 2015, Berclair Inc. had 600 million shares of common stock and 17 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2016, Berclair purchased 120 million shares of its common stock as treasury stock. Berclair issued a 6% common stock dividend on July 1, 2016. four million treasury shares were sold on October 1. Net income for the year ended December 31, 2016, was $850 million. Also outstanding at December...
On December 31, 2015, Berclair Inc. had 442 million shares of common stock and 5 million...
On December 31, 2015, Berclair Inc. had 442 million shares of common stock and 5 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. Net income for the year ended December 31, 2016, was $1,050 million. Also outstanding at December 31 were incentive stock options granted to executives. The options were exercisable for 30 million common shares at an exercise price of $56 per share. During 2016, the market price of the common shares averaged $70...
The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as...
The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as follows: Shareholders’ Equity Preferred stock, $100 par value; authorized, 300,000 shares; issued, 25,000 shares $2,500,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 416,000 shares 2,080,000 Paid-in capital in excess of par—preferred 81,000 Paid-in capital in excess of par—common 806,000 Retained earnings 3,120,000 $8,587,000 The following events occurred during 2016: Jan. 5 8,500 shares of authorized and unissued common stock were sold for...
The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as...
The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as follows: Shareholders’ Equity Preferred stock, $100 par value; authorized, 300,000 shares; issued, 32,500 shares $3,250,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 442,000 shares 2,210,000 Paid-in capital in excess of par—preferred 87,000 Paid-in capital in excess of par—common 875,000 Retained earnings 2,980,000 The following events occurred during 2016: Jan. 5 10,000 shares of authorized and unissued common stock were sold for $6...
The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as...
The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as follows: Shareholders’ Equity Preferred stock, $100 par value; authorized, 300,000 shares; issued, 33,000 shares $3,300,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 377,000 shares 1,885,000 Paid-in capital in excess of par—preferred 96,000 Paid-in capital in excess of par—common 825,000 Retained earnings 2,920,000 $9,026,000 The following events occurred during 2016: Jan. 5 10,500 shares of authorized and unissued common stock were sold for...
Please answer the problem below for all parts. Please show all work and write clearly. Thanks....
Please answer the problem below for all parts. Please show all work and write clearly. Thanks. (Apply total probability and Bayes’ rules) A large industrial firm uses three local motels to provide overnight accommodations for its clients. From past experience it is known that 22% of the clients are assigned rooms at the Ramada Inn, 50% at the Sheraton, and 28% at the Lakeview Motor Lodge. If the plumbing is faulty in 5% of the rooms at the Ramada Inn,...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT