ACC 291 WEEK 4 INDIVIDUAL ASSIGNMENT EXERCISES

291 WK 4 INDIVIDUAL ASSIGNMENT – EXERCISES

Complete Exercises E11-15, E12-1, & E12-2.

Complete Problem 11-6A.

E11-15

Before Action

After Stock Dividend

After Stock Split

Stockholders’ equity

Paid-in capital

Common stock

$600,000

$630,000

$600,000

In excess of par value

0

3,000 x ($14-$10)=

12,000

0

Total paid-in capital

600,000

642,000

600,000

Retained earnings

900,000

$900,000-(3,000 x $14)

858,000

900,000

Total stockholders’

equity

1,500,000$

$1,500,000

$1,500,000

Outstanding shares

60,000

63,000

120,000

Book value per share

$25.00

$23.81

$12.50

P11-6A

(a) Prepare the journal entries for the:

(1) Issuance of preferred stock for land.
Land 296,000
Preferred Stock 240,000 (2,400 x $100)
Paid-in Capital in Excess of Par Value—Preferred 56,000

(2) Issuance of common stock for cash.
Cash 7,700,000 ($2,000,000 + $5,700,000)
Common Stock2,000,000 (400,000 x $5)
Paid-in Capital in Excess of Stated Value—Common 5,700,000

(3) Purchase of common treasury stock for cash.
Treasury Stock 33,000 (1,500 x $22)
Cash 33,000

(4) Sale of treasury stock for cash.
Cash 14,000 (500 x $28)
Common Treasury Stock 11,000 (500 x $22)
Paid-in Capital from Treasury Stock 3,000 (500 x $6)

(b) Prepare the stockholders’ equity section at December 31, 2011.