correction need it
Wilco Corporation has the following account balances at December 31, 2
0
1
2.
Common stock
, $5 par value
$
555,600
Treasury stoc
k
90,720
Retained earn
ings
2,426,200
Paid-in capital
in excess of par—common stock
1,321,900
Prepare Wilco’s December 31, 2012, stockholders’ equity section.
(For preferred stock, common stock and treasury stock enter the account name only and do not provide the descriptive information provided in the question.)
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WILCO CORPORATION |
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$ |
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:
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Sprinkle Inc. has outstanding 10,050 shares of $10 par value common stock. On July 1, 2012, Sprinkle reacquired 107 shares at $89 per share. On September 1, Sprinkle reissued
61
shares at $90 per share. On November 1, Sprinkle reissued 46 shares at $85 per share.
Prepare Sprinkle’s journal entries to record these transactions using the cost method.
(If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
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7/1/12 |
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9/1/12 |
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11/1/12 |
Graves Mining Company declared, on April 20, a dividend of $
519,800
, on its $5 par common stock, payable on
June 1
. Of this amount, $133,700 is a return of capital.
Prepare the April 20 and June 1 entries for Graves.
(If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Apr. 20 |
| June 1 |
Apr. 20
Retained Earn
ings = ($519,800
–
$133,700) = $
386,100
Abernathy Corporation was organized on January 1, 20
12.
It is authorized to issue 10,290 shares of 8%, $65 par value preferred stock, and 544,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.
Jan. 10
Issued
80,330
shares of common stock for cash at $6 per share.
Mar. 1
Issued 5,670 shares of preferred stock for cash at $113 per share.
Apr. 1
Issued 24,730 shares of common stock for land. The asking price of the land was $90,540; the fair value of the land was $80,330.
May 1
Issued 80,330 shares of common stock for cash at $9 per share.
Aug. 1
Issued 10,290 shares of common stock to attorneys in payment of their bill of $50,620 for services rendered in helping the company organize.
Sept. 1
Issued 10,290 shares of common stock for cash at $11 per share.
Nov. 1
Issued 1,940 shares of preferred stock for cash at $115 per share.
Prepare the journal entries to record the above transactions.
(If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
April 1
Jan. 10
Cash
(80,330 x $6) = $
481,980
Common Stock
(80,330 x $2) = $
160,660
Paid-in Capital
in Excess of Stated Value—Common Stock (80,330 x $4) = $
321,320
Mar. 1
Cash (5,670 x $113) = $
640,710
Preferred Stoc
k (5,670 x $65) = $
368,550
Paid-in Capital in Excess of Par—Preferred Stock (5,670 x $48) = $
272,160
April 1
Common Stock (24,730 x $2) = $
49,460
Paid-in Capital in Excess of Stated Value—Common Stock ($80,330 – $49,460) = $
30,870
May 1
Cash (80,330 x $9) = $
722,970
Common Stock (80,330 x $2) = $160,660
Paid-in Capital in Excess of Stated Value—Common Stock (80,330 x $7) = $
562,310
Aug. 1
Common Stock (10,290 x $2) = $
20,580
Paid-in Capital in Excess of Stated Value—Common Stock ($50,620 – $20,580) = $
30,040
Sept. 1
Cash (10,290 x $11) = $
113,190
Common Stock (10,290 x $2) = $20,580
Paid-in Capital in Excess of Stated Value—Common Stock (10,290 x $9) = $
92,610
Nov. 1
Cash (1,940 x $115) = $
223,100
Preferred Stock (1,940 x $65) = $
126,100
Paid-in Capital in Excess of Par Value—Preferred Stock (1,940 x $50) = $
97,000
Sanborn Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Sanborn then entered into the following transactions.
|
1. |
Purchased 5,000 treasury shares at $45 per share. |
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|
2. |
Resold 500 of the treasury shares at $40 per share. |
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3. |
Resold 2,000 of the treasury shares at $49 per share. |
Indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Sanborn Company uses the cost method.
|
# |
Assets |
Liabilities |
Stockholders’ |
Paid-in |
Retained |
Net |
The following information has been taken from the ledger accounts of Sampras Corporation.
|
Total income since incorporation |
$327,200 |
|
Total cash dividends paid |
75,500 |
|
Total value of stock dividends distributed |
54,100 |
|
Gains on treasury stock transactions |
18,530 |
|
Unamortized discount on bonds payable |
32,410 |
Determine the current balance of retained earnings.
|
Current balance of retained earnings |
The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2012.
In 2012, 15,610 shares were authorized and 7,860 shares of common stock ($59 par value) were issued at a price of $6
5.
In 2013, 1,020 shares were issued as a stock dividend when the stock was selling for $6
9.
350 shares of common stock were bought in 2014 at a cost of $75 per share. These 350 shares are still in the company treasury.
In 2013, 12,000 preferred shares were authorized and the company issued 5,090 of them ($100 par value) at $112. Some of the preferred stock was reacquired by the company and later reissued for $
4,660
more than it cost the company.
The corporation has earned a total of $611,100 in net income after income taxes and paid out a total of $329,200 in cash dividends since incorporation.
Prepare the stockholders’ equity section of the balance sheet in proper form for Vicario Corporation as of December 31, 201
4.
Account for treasury stock using the cost method.
(For preferred stock, common stock and treasury stock enter the account name only and do not provide the descriptive information provided in the question.)
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VICARIO CORPORATION |
Linden Corporation is preparing its December 31, 2012, financial statements. Two events that occurred between December 31, 2012, and March 10, 2013, when the statements were issued, are described below.
1. A liability, estimated at $160,000 at December 31, 2012, was settled on February 26, 2013, at $170,000.
2. A flood loss of $80,000 occurred on March 1, 2013.
What effect do these subsequent events have on 2012 net income?
(If there is no impact select
not change
and 0 for the amount.)
Net income will by $ as a result of the adjustment of the liability.
Net income will by $ as a result of the adjustment of the flood loss.
Keystone Corporation issued its financial statements for the year ended December 31, 2012, on March 10, 2013. The following events took place early in 2013.
(a)
On January 10,
10,000
shares of $5 par value common stock were issued at $66 per share.
(b)
On March 1, Keystone determined after negotiations with the Internal Revenue Service that income taxes payable for 2012 should be $1,320,000. At December 31, 2012, income taxes payable were recorded at $1,100,000.
Discuss how the preceding post-balance-sheet events should be reflected in the 2012 financial statements.
For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.
|
Sr. No. |
Subsequent (Post-Balance-Sheet) Events |
|
Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end. |
|
|
Introduction of a new product line. |
|
|
Loss of assembly plant due to fire. |
|
| 4. |
Sale of a significant portion of the company’s assets. |
| 5. |
Retirement of the company president. |
|
6. |
Issuance of a significant number of shares of common stock. |
|
7. |
Loss of a significant customer. |
|
8. |
Prolonged employee strike. |
| 9. |
Material loss on a year-end receivable because of a customer’s bankruptcy. |
|
10. |
Hiring of a new president. |
|
11. |
Settlement of prior year’s litigation against the company. |
| 12. |
Merger with another company of comparable size. |
555,600
519,800
Cash
481,980
Common Stock
160,660
Paid-in Capital
321,320
Cash
640,710
Paid-in capital
Preferred Stoc
368,550
Paid-in Capital
272,160
Land
80,330
Common Stock
49,460
Paid-in Capital
30,870
Cash
722,970
Common Stock
160,660
Paid-in Capital
Total Paid-in Capital
562,310
Organization E
50,620
Common Stock
20,580
Paid-in Capital
30,040
Cash
113,190
1,877,500
Common Stock
20,580
Paid-in Capital
92,610
Cash
223,100
Preferred Stoc
Retained earn
126,100
Paid-in Capital
97,000
Decrease
No effect
Decrease
No effect
No effect
No effect
Increase
No effect
Increase
No effect
Decrease
No effect
Increase
No effect
Increase
Increase
No effect
4,303,700
No effect
197,600
Capital Stock
Preferred stoc
509,000
Common stock
523,920
Total Capital Stock
1,032,920
Additional Paid-in Capital
Less
Paid-in capital
61,080
Paid-in capital
57,360
Paid-in capital
4,660
123,100
Total Paid-in Capital
1,156,020
Retained earn
Treasury stoc
211,520
Total Paid-in Capital and Retained Earnings
1,367,540
Less
Cost of treasu
26,250
Total Stockholders’ Equity
1,341,290
decrease
10,000
not change
0
a) No adjustment to the financial statements is recorded. However, this event should be disclosed either in a note, a supplemental schedule, or even proforma financial data.
b) The income tax liability existed at December 31, 2012, but the amount was not certain. This event affects the estimate previously made and should result in an adjustment of the financial statements. The correct amount ($1,320,000) would have been recorded at December 31 if it had been available. Therefore, Keystone should increase income tax expense in the 2012 income statement by $220,000 ($1,320,000
–
$1,100,000). In the balance sheet, income taxes payable should be increased and retained earnings decreased by $220,000.
Adjust the Financial Statements
Neither Adjust nor Disclose.
Disclose in Notes to the Financial Statements
Disclose in Notes to the Financial Statements
Neither Adjust nor Disclose.
Disclose in Notes to the Financial Statements
Neither Adjust nor Disclose.
Total Stockholders’ Equity
Neither Adjust nor Disclose.
Adjust the Financial Statements
Neither Adjust nor Disclose.
Adjust the Financial Statements
Disclose in Notes to the Financial Statements
4,212,980
Treasury Stoc
9,523
Cash
9,523
Cash
5,490
Treasury Stoc
5,429
Paid-in Capital
61
Cash
3,818
Paid-in Capital
276
Treasury Stoc
4,094
Retained Earn
386,100
Common stock
Paid-in Capital
133,700
Dividends Pay
519,800
Dividends Pay
519,800
Cash
