Question

ATTENTION I NEED ONLY PART C !!

Part A

In late 2017 the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2018, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $12 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $25 per share.

Required:

1. Prepare journal entries to record these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2018. (Assume net income for the first quarter 2013 was $1,050,000.)

Part B

During 2018, the Nicklaus Corporation participated in three treasury stock transactions:

a.            On June 30, 2018, the corporation reacquires 280,000 shares for the treasury at a price of $14 per share.

b.            On July 31, 2018, 40,000 treasury shares are reissued at $17 per share.

c.             On September 30, 2018, 40,000 treasury shares are reissued at $12 per share.

Required:

1. Prepare journal entries to record these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $2,500,000.)

Part C

On October 1, 2019, Nicklaus Corporation receives permission to replace its $1 par value common stock (4,000,000 shares authorized 2,000,000 shares issued, and 1,800,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation.

    On November 1, 2013, the Nicklaus Corporation declares a $0.04 per share cash dividend on common stock and a $0.20 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2018, to shareholders of record on November 15, 2018.

    On December 2, 2018, the Nicklaus Corporation declares a 2% stock dividend payable on December 28, 2018, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $12 per share. The dividend will result in 72,000 (0.03 *3,600,000) additional shares being issued to shareholders.

Required:

1.Prepare journal entries to record the declaration and payment of these stock and cash dividends.

2. Prepare the December 31, 2018, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,000,000.) (Enter your answers in whole dollars.)

3.Prepare a statement of shareholders' equity for Nicklaus Corporation for 2018. (Enter your answers in thousands.)

October 01, 2018 No Journal entry required

Answer 1

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Part A
1. Journal Entry
Date	Account	Debit	Credit
02-Jan-18	Cash	24000000			2000000*12
	Common Stock		2000000		2000000*1
	Paid in Capital excess at par, common stock		22000000
02-Jan-18	Cash	25000000			1000000*25
	Preferred Stock		5000000		1000000*5
	Paid in Capital excess at par, Preferred Stock		20000000
2. Shareholder Equity:
	Preferred stock, $5 par, authorized 1,000,000 shares,
	issued and outstanding 1,000,000 shares	5000000
	Common stock, $1 par, authorized 4,000,000 shares
	issued and outstanding 2,000,000 shares	2000000
	Paid-in capital – excess of par	42000000
	Retained Earning	1050000
	Shareholder Equity	50050000
Part B
Date	Account	Debit	Credit
June 30	Treasury Stock	3920000			280000*14
	Cash		3920000
Jul 31	Cash	680000			40000*17
	Treasury Stock		560000		40000*14
	Paid-in capital – share repurchase		120000		40000*(17-14)
Sep 30	Cash	480000			40000*12
	Paid-in capital – share repurchase	80000			40000*(14-12)
	Treasury Stock		560000		40000*14
2. Shareholder Equity:
	Preferred stock, $5 par, authorized 1,000,000 shares,
	issued and outstanding 1,000,000 shares	5000000
	Common stock, $1 par, authorized 4,000,000 shares
	issued and outstanding 1800000 shares	2000000
	Paid-in capital – excess of par	42000000
	Paid in capital-share pur (120000-80000)	40000
	Retained Earning (1050000+2500000)	3550000
		52590000
	Less: Treasury Stock (200000*14)	-2800000
	Shareholder Equity	49790000
Part C
1. Journal Entry
		Debit	Credit
Oct 1	No Entry
Nov 1	Retained Earning	344000
	Dividend Payable-Common		144000	0.04*(3600000)
	Dividend Payable-Preferred		200000	0.2*1000000
Nov 15	No Entry
Dec 1	Dividend Payable-Common	144000
	Dividend Payable-Preferred	200000
	Cash		344000
Dec 2	Retained Earning	864000		72000*12
	Common stock dividend distruble		36000	72000*0.5
	Paid in capital, excess at par, common		828000
Dec 28	Common stock dividend distruble	36000
	Common Stock		36000
2. Shareholder Equity:

2. Shareholder Equity:
	Preferred stock, $5 par, authorized 1,000,000 shares,
	issued and outstanding 1,000,000 shares	5000000
	Common stock, $1 par, authorized 4,000,000 shares
	issued and outstanding 3672000 shares	2036000		2000000+36000
	Paid-in capital – excess of par	42828000		42000000+828000
	Paid in capital-share pur (120000-80000)	40000
	Retained Earning (1050000+2500000+2000000-344000-864000)	4342000
		54246000
	Less: Treasury Stock (200000*14)	-2800000
	Shareholder Equity	51446000
3. Shareholder Equity Statement
	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earning	Treasury Stock	Total
Jan 2, 2017
Issue of Preferred Stock	5000		20000			25000
Issue of Common Stock		2000	22000			24000
Purchase of Treasury Stock					-3920	-3920
Sale of Treasury Stock			40		1120	1160
Net Income				5550		5550
Common Cash Dividend				-144		-144
Preferred Cash Dividend				-200		-200
Stock Dividend		36	828	-864		0
Dec-31	5000	2036	42868	4342	-2800	51446