Question
In: Accounting
Below you will find the shareholders’ equity section of Zuzu Corp. at December 31, 2017: Preferred...
Below you will find the shareholders’ equity section of Zuzu Corp. at December 31, 2017:
| Preferred shares, authorized 100,000 shares; issued 25,000 shares (note 1) | $ 750,000 |
| Common shares (unlimited authorized, 60,000 issued) | 1,800,000 |
| Contributed surplus | 150,000 |
| Total paid-in capital | 2,700,000 |
| Retained earnings | 2,470,500 |
| Total shareholders’ equity | 5,170,500 |
Note 1: The preferred shares have a $2 dividend rate, are cumulative, and participate in distributions in excess of a $3 dividend on the common shares.
Required:
1) No dividends were paid in 2015 or 2016. On December 31, 2017, Zuzu wants to pay a cash dividend of $4 per share to common shareholders. How much cash would be needed for the total amount to be paid to preferred and common shareholders?
2) The company decides instead that it will declare a 15% stock dividend on the outstanding common shares. The common shares’ fair value on the date of declaration is $45 per share. Prepare the entry on the date of declaration.
3) The company decides instead to acquire and cancel 10,500 common shares at the current fair value of $45 per share. Prepare the entry to record the retirement, assuming the contributed surplus balance arose from previous cancellations of common shares.
Please show all workings
Solutions
ekkarill92 answered 1 year agoRelated Solutions
The stockholders’ equity section of Riverbed Corporation appears below as of December 31, 2017. 8% preferred...
The stockholders’ equity section of Riverbed Corporation appears
below as of December 31, 2017.
8% preferred stock, $50 par value, authorized
101,534 shares, outstanding 91,534
shares
$4,576,700
Common stock, $1.00 par, authorized and issued 10,678,400
shares
10,678,400
Additional paid-in capital
20,535,300
Retained earnings
$134,073,000
Net income
36,960,000
171,033,000
$206,823,400
Net income for 2017 reflects a total effective tax rate of 34%.
Included in the net income figure is a loss of $11,162,800 (before
tax) as a result of a non-recurring...
Emerge Corp. reported the following amounts in the shareholders’ equity section of its December 31, 2016...
Emerge Corp. reported the following
amounts in the shareholders’ equity section of its December 31,
2016 statement of financial position:
Preferred shares, $8 dividend (10,000 shares authorized, 2,000
shares issued)
$ 200,000
Common shares (unlimited authorized, 25,000 issued)
600,000
Contributed surplus
55,000
Retained earnings
250,000
Accumulated other comprehensive income
75,000
Total
$1,180,000
During 2017, the company had the
following transactions that affect shareholders’ equity.
1. Paid the annual 2016 $8 per share dividend on preferred
shares and a $3 per...
Emerge Corp. reported the following amounts in the shareholders' equity section of its December 31, 2016...
Emerge Corp. reported the following amounts in the shareholders'
equity section of its December 31, 2016 statement of financial
position:
Preferred shares, $8 dividend (10,000 shares authorized, 2,000
shares issued) = $200,000
Common shares (unlimited authorized, 25,000 issued) =
$600,000
Contributed surplus = $55,000
Retained earnings = $250,000
Accumulated other comprehensive income = $75,000
Total = $1,180,000
During 2017, the company had the following transactions that
affect shareholders' equity.
1) Paid the annual 2016 $8 per share dividend on preferred...
Bramble Corp. reported the following amounts in the shareholders’ equity section of its December 31, 2016...
Bramble Corp. reported the following amounts in the
shareholders’ equity section of its December 31, 2016 statement of
financial position:
Preferred shares, $7 dividend (8,000 shares authorized, 1,800
shares issued)
$198,000
Common shares (unlimited authorized, 20,000 issued)
480,000
Contributed surplus
41,700
Retained earnings
280,000
Accumulated other comprehensive income
70,000
Total
$1,069,700
During 2017, the company had the following transactions that affect
shareholders’ equity.
1.
Paid the annual 2016 $7 per share dividend on preferred shares
and a $4 per share...
National Supply’s shareholders’ equity included the following accounts at December 31, 2017: Shareholders' Equity ($ in...
National Supply’s shareholders’ equity included the following
accounts at December 31, 2017:
Shareholders'
Equity
($
in millions)
Common stock, 4
million shares at $1 par
$
4,000,000
Paid-in capital—excess of
par
16,000,000
Retained earnings
73,000,000
Required:
1a. National Supply reacquired shares of its common stock in two
separate transactions and later sold shares. Prepare the entries
for each of the transactions under each of two separate
assumptions: the shares are (a) retired and (b) accounted for as
treasury stock.
February...
National Supply’s shareholders’ equity included the following accounts at December 31, 2017: Shareholders' Equity ($ in...
National Supply’s shareholders’ equity included the following
accounts at December 31, 2017:
Shareholders' Equity
($ in millions)
Common stock, 3 million shares at $1 par
$
3,000,000
Paid-in capital—excess of par
9,000,000
Retained earnings
71,500,000
Required:
1. National Supply reacquired shares of its common
stock in two separate transactions and later sold shares. Prepare
the entries for each of the transactions under each of two separate
assumptions: the shares are (a) retired and (b) accounted for as
treasury stock.
February...
National Supply’s shareholders’ equity included the following accounts at December 31, 2017: Shareholders' Equity ($ in...
National Supply’s shareholders’ equity included the following
accounts at December 31, 2017: Shareholders' Equity ($ in millions)
Common stock, 7 million shares at $1 par $ 7,000,000 Paid-in
capital—excess of par 63,000,000 Retained earnings 95,500,000
Required: 1. National Supply reacquired shares of its common stock
in two separate transactions and later sold shares. Prepare the
entries for each of the transactions under each of two separate
assumptions: the shares are (a) retired and (b) accounted for as
treasury stock. February...
The shareholders’ equity of Cameron Corp. as of 31 December 2016, the end of the current...
The shareholders’ equity of Cameron Corp. as of 31 December
2016, the end of the current fiscal year, is as follows:
$1 cumulative preferred shares, no-par, convertible at the rate
of 2-for-1; 270,000 shares outstanding $9,166,000
Common shares, no-par; 1,900,000 shares outstanding
16,600,000
Common stock conversion rights 247,000 Retained earnings
30,760,000
Additional information:
On 1 July 2016, 182,000 preferred shares were converted to
common shares at the rate of 2-for-1.
During 2016, Cameron had convertible subordinated debentures
outstanding with a...
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...
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