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ACC291 / ACC 291 / Week 4 Wiley Plus: 11-1, E11-15, E11-16, P11-6A, P11-8A

ACC291 / ACC 291 / Week 4 Wiley Plus: 11-1, E11-15, E11-16, P11-6A, P11-8A

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11-1
Indicate whether each of the following statements is true or false. E11-15
On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.
Complete the tabular summary of the effects of the alternative actions on the components of stockholders' equity and outstanding shares. E11-16
Before preparing financial statements for the current year, the chief accountant for Springer Company discovered the following errors in the accounts.
1. The declaration and payment of $50,000 cash dividend was recorded as a debit to Interest Expense $50,000 and a credit to Cash $50,000.
2. A 10% stock dividend (1,000 shares) was declared on the $10 par value stock when the market value per share was $16. The only entry made was: Retained Earnings (Dr.) $10,000 and Dividend Payable (Cr.) $10,000. The shares have not been issued.
3. A 4-for-1 stock split involving the issue of 400,000 shares of $5 par value common stock for 100,000 shares of $20 par value common stock was recorded as a debit to Retained Earnings $2,000,000 and a credit to Common Stock $2,000,000.
Prepare the correcting entries at December 31. P11-6A
Arnold Corporation has been authorized to issue 40,000 shares of $100 par value, 8%, noncumulative preferred stock and 2,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2011, the ledger contained the following balances pertaining to stockholders' equity.
Preferred Stock
$240,000
Paid-in Capital in Excess of Par Value-Preferred
56,000
Common Stock
2,000,000
Paid-in Capital in Excess of Stated Value-Common
5,700,000
Treasury Stock-Common (1,000 shares)
22,000
Paid-in Capital from Treasury Stock
3,000
Retained Earnings
560,000
The preferred stock was issued for land having a fair market value of $296,000. All common stock issued was for cash. In November, 1,500 shares of common stock were purchased for the treasury at a per share cost of $22. In December, 500 shares of treasury stock were sold for $28 per share. No dividends were declared in 2011.
Prepare the journal entries for the: (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)
1. Issuance of preferred stock for land.
2. Issuance of common stock for cash.
3. Purchase of common treasury stock for cash.
4. Sale of treasury stock for cas P11-8A
The following stockholders' equity accounts arranged alphabetically are in the ledger of McGrath Corporation at December 31, 2011.
Common Stock ($10 stated value)
$1,500,000
Paid-in Capital from Treasury Stock
6,000
Paid-in Capital in Excess of Stated Value-Common Stock
690,000
Paid-in Capital in Excess of Par Value-Preferred Stock
288,400
Preferred Stock (8%, $100 par, noncumulative)
400,000
Retained Earnings
776,000
Treasury Stock-Common (8,000 shares)
88,000
11-1
Indicate whether each of the following statements is true or false. E11-15
On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.
Complete the tabular summary of the effects of the alternative actions on the components of stockholders' equity and outstanding shares. E11-16
Before preparing financial statements for the current year, the chief accountant for Springer Company discovered the following errors in the accounts.
1. The declaration and payment of $50,000 cash dividend was recorded as a debit to Interest Expense $50,000 and a credit to Cash $50,000.
2. A 10% stock dividend (1,000 shares) was declared on the $10 par value stock when the market value per share was $16. The only entry made was: Retained Earnings (Dr.) $10,000 and Dividend Payable (Cr.) $10,000. The shares have not been issued.
3. A 4-for-1 stock split involving the issue of 400,000 shares of $5 par value common stock for 100,000 shares of $20 par value common stock was recorded as a debit to Retained Earnings $2,000,000 and a credit to Common Stock $2,000,000.
Prepare the correcting entries at December 31. P11-6A
Arnold Corporation has been authorized to issue 40,000 shares of $100 par value, 8%, noncumulative preferred stock and 2,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2011, the ledger contained the following balances pertaining to stockholders' equity.
Preferred Stock
$240,000
Paid-in Capital in Excess of Par Value-Preferred
56,000
Common Stock
2,000,000
Paid-in Capital in Excess of Stated Value-Common
5,700,000
Treasury Stock-Common (1,000 shares)
22,000
Paid-in Capital from Treasury Stock
3,000
Retained Earnings
560,000
The preferred stock was issued for land having a fair market value of $296,000. All common stock issued was for cash. In November, 1,500 shares of common stock were purchased for the treasury at a per share cost of $22. In December, 500 shares of treasury stock were sold for $28 per share. No dividends were declared in 2011.
Prepare the journal entries for the: (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)
1. Issuance of preferred stock for land.
2. Issuance of common stock for cash.
3. Purchase of common treasury stock for cash.
4. Sale of treasury stock for cas P11-8A
The following stockholders' equity accounts arranged alphabetically are in the ledger of McGrath Corporation at December 31, 2011.
Common Stock ($10 stated value)
$1,500,000
Paid-in Capital from Treasury Stock
6,000
Paid-in Capital in Excess of Stated Value-Common Stock
690,000
Paid-in Capital in Excess of Par Value-Preferred Stock
288,400
Preferred Stock (8%, $100 par, noncumulative)
400,000
Retained Earnings
776,000
Treasury Stock-Common (8,000 shares)
88,000

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