Problem 18-12 Various shareholders' equity topics; comprehensive [LO18-1, 18-4, 18-5, 18-6, 18-7, 18-8]
Part A
In late 2017, the Nicklaus Corporation was formed. The corporate
charter authorizes the issuance of 6,000,000 shares of common stock
carrying a $1 par value, and 2,000,000 shares of $5 par value,
noncumulative, nonparticipating preferred stock. On January 2,
2018, 4,000,000 shares of the common stock are issued in exchange
for cash at an average price of $10 per share. Also on January 2,
all 2,000,000 shares of preferred stock are issued at $25 per
share.
Required:
1. Prepare journal entries to record these
transactions.
2. Prepare the shareholders' equity section of the
Nicklaus balance sheet as of March 31, 2018. (Assume net income for
the first quarter 2018 was $1,900,000.)
Part B
During 2018, the Nicklaus Corporation participated in three
treasury stock transactions:
Required:
1. Prepare journal entries to record these
transactions.
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 $3,400,000.)
Part C
On October 1, 2018, Nicklaus Corporation receives permission to
replace its $1 par value common stock (6,000,000 shares authorized,
4,000,000 shares issued, and 3,800,000 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, 2018, the Nicklaus Corporation declares a $0.21 per
share cash dividend on common stock and a $0.38 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 1% 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 $10 per share. The dividend will
result in 76,000 (0.01 × 7,600,000) 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 $2,900,000.)
3. Prepare a statement of shareholders' equity for
Nicklaus Corporation for 2018.
In: Accounting
the
CASE STUDY :
The management board of an organization want to start a project that can generate income in order to get a better financial position and better quality of services it is rendering to the community. The Board of Directors asked you to help in sitting an operating budget including a cash budget for the six months ending 31/12/2018. The Board of Directors has promised to secure $100,000 for this project if it proves to be profitable.
Their accountant gathered theses data:
|
July 16 |
Aug 16 |
Sept 16 |
Oct 16 |
Nov 16 |
Dec 16 |
|
|
Estimated Sales in $ |
0 |
20,000 |
30,000 |
50,000 |
100,000 |
100,000 |
*** you were asked to Prepare in good form
a. A profit and loss budget for the 6 months ending 31/12/2018.
b. A balance sheet budget as at 31/12/2018
c. A cash flow budget for the 6 months ending 31/12/2018.
d. As a Board of Director Member would you approve to fund the project. Why?
In: Accounting
Assume Nortel Networks contracted to provide a customer with
Internet infrastructure for $2,450,000. The project began in 2018
and was completed in 2019. Data relating to the contract are
summarized below:
| 2018 | 2019 | |||||
| Costs incurred during the year | $ | 336,000 | $ | 1,870,000 | ||
| Estimated costs to complete as of 12/31 | 1,344,000 | 0 | ||||
| Billings during the year | 446,000 | 1,710,000 | ||||
| Cash collections during the year | 268,000 | 1,795,000 | ||||
Required:
1. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming Nortel
recognizes revenue over time according to percentage of
completion.
2. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming this project
does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming Nortel recognizes revenue over time according to
percentage of completion.
4. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming this project does not qualify for revenue
recognition over time.
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortel recognizes revenue over time according to percentage of completion. (Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)
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| % complete to date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ss profit (loss)
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In: Accounting
| Assets | |||||||
| Current assets | |||||||
| Cash | $ | 21,000 | $ | 17,000 | |||
| Marketable securities | 21,000 | 7,000 | |||||
| Accounts receivable (net) | 51,000 | 43,000 | |||||
| Inventories | 136,000 | 144,000 | |||||
| Prepaid items | 25,000 | 10,000 | |||||
| Total current assets | 254,000 | 221,000 | |||||
| Investments | 22,000 | 15,000 | |||||
| Plant (net) | 260,000 | 245,000 | |||||
| Land | 28,000 | 23,000 | |||||
| Total assets | $ | 564,000 | $ | 504,000 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Notes payable | $ | 24,600 | $ | 8,300 | |||
| Accounts payable | 58,800 | 45,000 | |||||
| Salaries payable | 25,000 | 19,000 | |||||
| Total current liabilities | 108,400 | 72,300 | |||||
| Noncurrent liabilities | |||||||
| Bonds payable | 140,000 | 140,000 | |||||
| Other | 25,000 | 20,000 | |||||
| Total noncurrent liabilities | 165,000 | 160,000 | |||||
| Total liabilities | 273,400 | 232,300 | |||||
| Stockholders’ equity | |||||||
| Preferred stock, (par value $10, 4% cumulative, non-participating; 8,000 shares authorized and issued) | 80,000 | 80,000 | |||||
| Common stock (no par; 50,000 shares authorized; 10,000 shares issued) | 80,000 | 80,000 | |||||
| Retained earnings | 130,600 | 111,700 | |||||
| Total stockholders’ equity | 290,600 | 271,700 | |||||
| Total liabilities and stockholders’ equity | $ | 564,000 | $ | 504,000 | |||
| MUNOZ COMPANY | |||||||
|
Statements of Income and Retained Earnings For the Years Ended December 31 |
|||||||
| 2019 | 2018 | ||||||
| Revenues | |||||||
| Sales (net) | $ | 330,000 | $ | 310,000 | |||
| Other revenues | 10,000 | 7,000 | |||||
| Total revenues | 340,000 | 317,000 | |||||
| Expenses | |||||||
| Cost of goods sold | 165,000 | 133,000 | |||||
| Selling, general, and administrative | 65,000 | 60,000 | |||||
| Interest expense | 11,000 | 10,200 | |||||
| Income tax expense | 73,000 | 72,000 | |||||
| Total expenses | 314,000 | 275,200 | |||||
| Net earnings (net income) | 26,000 | 41,800 | |||||
| Retained earnings, January 1 | 111,700 | 77,000 | |||||
| Less: Preferred stock dividends | 3,200 | 3,200 | |||||
| Common stock dividends | 3,900 | 3,900 | |||||
| Retained earnings, December 31 | $ | 130,600 | $ | 111,700 | |||
Required
Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented, do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet.
Working capital.
Current ratio. (Round your answers to 2 decimal places.)
Quick ratio. (Round your answers to 2 decimal places.)
Receivables turnover (beginning receivables at January 1, 2018, were $44,000). (Round your answers to 2 decimal places.)
Average days to collect accounts receivable. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.)
Inventory turnover (beginning inventory at January 1, 2018, was $150,000). (Round your answers to 2 decimal places.)
Number of days to sell inventory. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.)
Debt to assets ratio. (Round your answers to the nearest whole percent.)
Debt to equity ratio. (Round your answers to 2 decimal places.)
Number of times interest was earned. (Round your answers to 2 decimal places.)
Plant assets to long-term debt. (Round your answers to 2 decimal places.)
Net margin. (Round your answers to 2 decimal places.)
Turnover of assets. (Round your answers to 2 decimal places.)
Return on investment. (Round your answers to 2 decimal places.)
Return on equity. (Round your answers to 2 decimal places.)
Earnings per share. (Round your answers to 2 decimal places.)
Book value per share of common stock. (Round your answers to 2 decimal places.)
Price-earnings ratio (market price per share: 2018, $12.25; 2019, $13.50). (Round your intermediate calculations and final answer to 2 decimal places.)
Dividend yield on common stock. (Round your answers to 2 decimal places.)
In: Accounting
In: Accounting
The profit in dollars from the sale of x expensive watches is P(x)=0.03x^2-4x+7x^0.7-4700.
Find the marginal profit when:
(a) x=400
(b) x=2000
(c) x=5000
(d) x=10,000
In: Statistics and Probability
In: Economics
ABC Inc has been in business since 2000 and continues to expand operations. The owners need $50 million in additional capital to build a new manufacturing plant. As their investment banker, what method would you recommend to the owners to raise capital?
In: Finance
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Discuss the potential impacts of climate change on world agricultural and food supple towards the world socio-economic. You will need to write an essay if about 1500-2000 words.
Please help me with the main points that I can include in this essay
In: Economics