2 Issuing Stock In-Class Exercise (Form groups and work exercise): Exercise PageE Stock Issue Transactions(Use the format, as reflected on the next slide, to complete this exercise)
3 Issuing Stock General Journal Exercise Page Date Description Debit CreditExercise PageE Issuing Stock at Par and No-Par
4 Issuing Stock Exercise E13-22: The charter of Evergreen Capital Corporation authorizes the issuance of 900 shares of preferred stock and 1,250 shares of common stock. During a two-month period, Evergreen completed these stock issuance transactions:Mar Issues 230 shares of $4 par value common stock for cash of $5 per share.Apr Received inventory with a market value of $23,000 and equipment with a market value of $20,000 for 320 shares of the $4 par value common stock.17 Issued 900 shares of 5%, $20 par value preferred stock for $20 per share.Requirements: (1) Record the transactions in the general journal. (2) Prepare the stockholders’ equity section of the Evergreen balance sheet as of April 30, Retained Earnings balance is $79,000.
8 Cash Dividends In-Class Exercise (Form groups and work exercises): Exercise PageE Dividends-Common/Preferred (Cumulative)
9 Cash Dividends Exercise E13-23: Northern Communications has the following stockholders’ equity:Preferred Stock – 6%, $11 Par Value; 150,000 shares authorized, 20,000 shares issued and outstanding…….. $ 220,000Common Stock -- $3 Par Value; 575,000 shares authorized, 400,000 shares issued and outstanding…… $1,200,000Retained Earnings……………………………………………... $ 190,000Requirements: (1) Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and stockholders for and 2015 if total dividend are if total dividends are $12,200 in and $55,000 in (2) Record the journal entries for 2014, assuming that Northern declared the dividend on December 1 for stockholders of record on December 10. Northern paid the dividend on December 20. (3) Record the journal entries for 2015, assuming that Northern declared the dividend on December 1 for stockholders of record on December 15. Northern paid the dividend on December 28.
10 Preferred Dividend Requirement Cash DividendsPreferred Dividend RequirementNote: Preferred stockholders are entitled to no more than $13,200 in any one year as follow: (a) $11 par value x 6% = $.66 per share (b) $.66 x 20,000 shares = $13,200
11 Preferred dividends in arrears $13.200 - $12,200 = $1,000 Cash DividendsPreferred dividends in arrears $ $12,200 = $1,000
18 Cash and Stock Dividends In-Class Exercise (Form groups and work exercise):Exercise PageE Cash and Stock Dividends(Use the format, as reflected on the next slide, to complete this exercise)
19 Cash and Stock Dividends General JournalDate Description Debit CreditExercise PageE Cash and Stock Dividends
20 Cash and Stock Dividends Exercise E13-26:Painting Schools, Inc. is authorized to issue 200,000 shares of $1 par common stock.The company issued 77,000 shares at $3 per share.When the market price of common stock was $5 per share, Painting declared and distributed a 10% stock dividend.Later, Painting declared and paid a $0.25 per share cash dividend.Requirements:(1) Journalize the declaration and the distribution of the stock dividend.(2) Journalize the declaration and the payment of the cash dividend.
21 Cash and Stock Dividends Dividend Shares Computation 77,000 shares x 10% = 7,700 shares 7,700 shares x $5 = $38,500
22 Cash and Stock Dividends 7,700 shares x $1 = $7,700
27 Treasury Stock Transactions In-Class Exercise (Form groups and work exercise):Exercise No PageE Treasury Stock Transactions(Use the format, as reflected on the next slide, to complete this exercise)
29 Treasury Stock Transactions Exercise E13-30:Stock transactions for Careful Driving School, Inc. follows:Mar Issued 22,000 shares of $1 par value common stock at $18 per share.May 22 Purchased 1,400 shares of treasury stock – common at $11 per share.Sep Sold 500 shares of treasury stock – common at $24 per share.Oct Sold 900 shares of treasury stock – common at $9 per share.Requirement:(1) Journalize the transactions.