When a company issues a stock dividend which of the following would be affected? a. Earnings per share. b. Total assets. c. Total liabilities. d. Total stockholders' equity. P 18-1 Various stock transactions; correction of journal entries LO4 Part A During its first year of operations, the McCollum Corporation entered into the following transactions relating to shareholders' equity. The corporation was authorized to issue 100 million common shares, $1 par per share. Required: Prepare the appropriate journal entries to record each transaction. p. 1055 Jan. 9 Issued 40 million common shares for $20 per share. Mar. 11 Issued 5,000 shares in exchange for custom-made equipment. McCollum's shares have traded recently on the stock exchange at $20 per share. Part B A new staff accountant for the McCollum Corporation recorded the following journal entries during the second year of operations. McCollum retires shares that it reacquires (restores their status to that of authorized but unissued shares). In millions Jan. 12 Land 2 Paid-In capital 2 Sept. 1 Common Stock 2 Retained Earnings 48 Cash 50 Dec. 1 Cash 26 Common Stock 1 Gain on Sale of prev. 25 Prepare the journal entries that should have been recorded for each of the transactions.
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