Question
In: Accounting
Squash Delight Inc. has the following balance sheet: Assets Cash $ 60,000 ' Accounts receivable 287,000...
Squash Delight Inc. has the following balance sheet:
Assets
Cash $ 60,000 '
Accounts receivable 287,000
Fixed assets 775,000
Total assets $ 1,122,000
Liabilities
Accounts payable $ 275,000
Notes payable 53,000
Common stock (120,000 shares @ $2 par) 240,000
Capital in excess of par 100,000
Retained earnings 454,000
Total liabilities & owners' equity $ 1,122,000 The firm’s stock sells for $10 a share.
a. Show the effect on the capital accounts of a two-for-one stock split. (Do not round intermediate calculations and round your answers to the nearest whole dollar.)
Common Stock _______
Capital Excess of par ________
Retained Earnings ________
Total Equity _________
b. Show the effect on the capital accounts of a 10 percent stock dividend. Part b is separate from part a. In part b do not assume the stock split has taken place.
Common stock _____________
Capital Excess of par ___________
Retained Earnings _________
Total Equity ____________
Solutions
Expert Solution
a. Show the effect on the capital accounts of a two-for-one stock split.
|
Common Stock |
$240000 |
|
Capital excess of par |
100000 |
|
Retained earnings |
454000 |
|
Total Equity |
$794000 |
Common stock = Shares outstanding x par value per share
= (2 x 120000) x .5 x $2
= 240000 x $1 = $240000
A stock split affects the number of shares outstanding and the par value of per share but has no effect on any of the equity account balances.
b. Show the effect on the capital accounts of a 10 percent stock dividend.
|
Common Stock |
$264000 |
|
Capital excess of par |
196000 |
|
Retained earnings |
334000 |
|
Total Equity |
$794000 |
Number of new shares = Dividend percent x Number of shares outstanding
= .10 x 120000 = 12000
Common Stock = Numbers of shares outstanding x par value per share
= (120000 + 12000) x $2 = $264000
Capital in excess of par = Original account balance + [ Number of new shares x (Stock price – Par value)]
= $100000 + 12000 x (10 - 2) = $196000
Retained Earnings = Original account balance – (Number of new shares x Stock price)
= 454000 – (12000 x $10) = $334000
ekkarill92 answered 1 year agoRelated Solutions
Squash Delight Inc. has the following balance sheet: Assets Cash $ 30,000 Accounts receivable 350,000 Fixed...
Squash Delight Inc. has the following balance sheet:
Assets
Cash
$
30,000
Accounts
receivable
350,000
Fixed assets
980,000
Total
assets
$
1,360,000
Liabilities
Accounts payable
$
295,000
Notes payable
55,000
Common stock (100,000
shares @ $4 par)
400,000
Capital in excess of
par
100,000
Retained earnings
510,000
Total
liabilities & owners' equity
$
1,360,000
The firm’s stock sells for $12 a share.
a. Show the effect on the capital accounts of a
two-for-one stock split. (Do not round intermediate
calculations...
Squash Delight Inc. has the following balance sheet: Assets Cash $ 30,000 Accounts receivable 317,000 Fixed...
Squash Delight Inc. has the following balance sheet:
Assets
Cash
$
30,000
Accounts receivable
317,000
Fixed assets
862,000
Total assets
$
1,209,000
Liabilities
Accounts payable
$
262,000
Notes payable
56,000
Common stock (130,000 shares @ $2 par)
260,000
Capital in excess of par
100,000
Retained earnings
531,000
Total liabilities & owners' equity
$
1,209,000
The firm’s stock sells for $12 a share.
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two-for-one stock split. (Do not round intermediate
calculations...
Squash Delight Inc. has the following balance sheet: Assets Cash $ 55,000 Accounts receivable 275,000 Fixed...
Squash Delight Inc. has the following balance sheet:
Assets
Cash
$
55,000
Accounts
receivable
275,000
Fixed assets
870,000
Total
assets
$
1,200,000
Liabilities
Accounts payable
$
250,000
Notes payable
58,000
Common stock (100,000
shares @ $2 par)
200,000
Capital in excess of
par
100,000
Retained earnings
592,000
Total
liabilities & owners' equity
$
1,200,000
The firm’s stock sells for $12 a share.
a. Show the effect on the capital accounts of a
two-for-one stock split. (Do not round intermediate
calculations...
Squash Delight Inc. has the following balance sheet: Assets Cash $ 90,000 Accounts receivable 307,000 Fixed...
Squash Delight Inc. has the following balance sheet:
Assets
Cash
$
90,000
Accounts receivable
307,000
Fixed assets
782,000
Total assets
$
1,179,000
Liabilities
Accounts payable
$
284,000
Notes payable
51,000
Common stock (100,000 shares @ $4 par)
400,000
Capital in excess of par
100,000
Retained earnings
344,000
Total liabilities & owners'
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1,179,000
The firm’s stock sells for $10 a share.
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two-for-one stock split. (Do not round intermediate
calculations...
Squash Delight Inc. has the following balance sheet: cash $45,00 Account receivable $295,000. fix assets 772,000....
Squash Delight Inc. has the following balance
sheet:
cash $45,00 Account receivable $295,000. fix assets 772,000. total
$1,112 000
Liabilities
Account payable $296 000, Note payable 54 000, Common stock
(100,000 share, @$2 par) 200 000. Capital in excess of par 100,000,
Retained earnings 462 000. Total liabilities & owner's equity
$1,112,000. The Firm's stock sells for $14 a share.
a. show the effect on the capital account of a
two-for-one stock split.
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SMC, Inc. Balance Sheet December 31, 2017 Assets Cash ......................................................................................................... $34,500 Accounts receivable ...................................................................
SMC, Inc. Balance Sheet December 31, 2017
Assets Cash
.........................................................................................................
$34,500
Accounts receivable
................................................................................
25,000
Inventory
..................................................................................................
10,000
Supplies
...................................................................................................
200
Total
assets..............................................................................................
$69,700
Liabilities and Stockholders’ Equity
Liabilities: Accounts payable
.............................................................................
$12,000
Salaries payable
...............................................................................
1,000 Income
taxes payable
......................................................................
3,675
Total
liabilities..........................................................................................
$16,675
Stockholders’ equity: Capital stock (10,000 shares
outstanding).................................... $25,000
Retained earnings
............................................................................
28,025
Total stockholders’ equity
.......................................................................
53,025
Total liabilities and stockholders’
equity................................................ $69,700
SMC, Inc. Income Statement For the Year Ended
December31,2017
Sales revenue
.............................................................................................
Illini Company, Inc. Balance Sheet as of 12/31/20X0 Assets Current Assets: Cash $1,500,000 Accounts receivable, net...
Illini Company, Inc.
Balance Sheet
as of 12/31/20X0
Assets
Current Assets:
Cash
$1,500,000
Accounts receivable, net
18,000
Inventory
50,000
Total current assets
1,568,000
Equipment
90,000
Goodwill
20,000
Total assets
$1,678,000
Liabilities and shareholders' equity
Shareholders' equity:
Common stock, 20,000 shares outstanding, $1 par
$20,000
Additional paid-in capital
280,000
Retained earnings
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Total shareholders' equity
1,678,000
Total liabilities and shareholders' equity
$1,678,000
Note that all additional paid-in capital (APIC) sub accounts
(e.g., APIC-options...
The Balance Sheet of the Illini as of 12/31/20X0: Assets Current Assets: Cash 1,500,000 Accounts receivable,...
The Balance Sheet of the Illini as of
12/31/20X0:
Assets
Current Assets:
Cash 1,500,000
Accounts receivable, net 18,000
Inventory 50,000
Total current assets 1,568,000
Equipment 90,000
Goodwill 20,000
Total assets $1,678,000
Liabilities and shareholders' equity
Shareholders' equity:
Common stock, 20,000 shares outstanding, $1 par 20,000
Additional paid-in capital 280,000
Retained earnings 1,378,000
Total shareholders' equity 1,678,000
Total liabilities and shareholders' equity 1,678,000
Note that all additional paid-in capital (APIC) sub accounts
(e.g., APIC-options and APIC-treasury stock), if any, are tracked...
The Balance Sheet of the Illini as of 12/31/20X0: Assets Current Assets: Cash 1,500,000 Accounts receivable,...
The Balance Sheet of the Illini as of
12/31/20X0:
Assets
Current Assets:
Cash 1,500,000
Accounts receivable, net 18,000
Inventory 50,000
Total current assets 1,568,000
Equipment 90,000
Goodwill 20,000
Total assets $1,678,000
Liabilities and shareholders' equity
Shareholders' equity:
Common stock, 20,000 shares outstanding, $1 par 20,000
Additional paid-in capital 280,000
Retained earnings 1,378,000
Total shareholders' equity 1,678,000
Total liabilities and shareholders' equity 1,678,000
Note that all additional paid-in capital (APIC) sub accounts
(e.g., APIC-options and APIC-treasury stock), if any, are tracked...
SMC, Inc. Balance Sheet December 31, 2018 Assets Cash ... $34,500 Accounts receivable .25,000 Inventory ..10,000...
SMC, Inc. Balance Sheet December 31, 2018
Assets
Cash ... $34,500 Accounts receivable .25,000 Inventory ..10,000
Supplies .. 200 Total assets.. $69,700 Liabilities and
Stockholders’ Equity Liabilities: Accounts payable .. $12,000
Salaries payable .. 1,000 Income taxes payable .. 3,675 Total
liabilities.. $16,675 Stockholders’ equity: Capital stock (10,000
shares outstanding).. $25,000 Retained earnings .. 28,025 Total
stockholders’ equity ...53,025 Total liabilities and stockholders’
equity.. $69,700
SMC, Inc. Income Statement For the Year Ended
December31,2018
Sales revenue .. $110,000 Rent revenue.....
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