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15 - 38 Test Bank for Intermediate Accounting, Twelfth Edition
Solution 15-129
Event #2—Jan. 16
-0-0-0(82,000)
———————————————————————————————————————————
Balance
410,000
$2,050,000
$880,000
$2,918,000
#3—Feb. 10
20,000
100,000
140,000
-0———————————————————————————————————————————
Balance
430,000
$2,150,000
$1,020,000
$2,918,000
#4—March 1
129,000
645,000
-0(645,000)
———————————————————————————————————————————
Balance
559,000
$2,795,000
$1,020,000
$2,273,000
#5—April 1
559,000
-0-0-0———————————————————————————————————————————
Balance
1,118,000
$2,795,000
$1,020,000
$2,273,000
#6—July 1
167,700
419,250
1,257,750
(1,677,000)
———————————————————————————————————————————
Balance
1,285,700
$3,214,250
$2,277,750
$596,000
#7—Aug. 1
-0-0-0(257,140)
———————————————————————————————————————————
Balance
1,285,700
$3,214,250
$2,277,750
$338,860
Pr. 15-130—Equity transactions.
Sands Corporation has the following capital structure at the beginning of the year:
6% Preferred stock, $50 par value, 20,000 shares authorized,
6,000 shares issued and outstanding
Common stock, $10 par value, 60,000 shares authorized,
40,000 shares issued and outstanding
Paid-in capital in excess of par
Total paid-in capital
Retained earnings
Total stockholders' equity
$
300,000
400,000
110,000
810,000
440,000
$1,250,000
Instructions
(a) Record the following transactions which occurred consecutively (show all calculations).
1. A total cash dividend of $90,000 was declared and payable to stockholders of record.
Record dividends payable on common and preferred stock in separate accounts.
2. A 10% common stock dividend was declared. The average market value of the common
stock is $18 a share.
3. Assume that net income for the year was $150,000 (record the closing entry) and the
board of directors appropriated $70,000 of retained earnings for plant expansion.
(b) Construct the stockholders' equity section incorporating all the above information.