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"**Please answer and show all calculations formulas ETC. and insert solutions to the excel file attached. Thanks 1. The following information was taken from the balance sheet of Herman Corporation on December 31, 2009: Preferred stock, 8%, $100 par value, . . . . . . . . $3,000,000 Common stock, $10 par value, 300,000 shares authorized; __??__ shares issued and _??____ outstanding .................................. 1,600,000 Additional paid-in capital In excess of par value-common................... 400,000 Retained Earnings .................................. 700,000 Treasury stock (5,000 shares)............... 150,000 INSTRUCTIONS Complete the following statements and show your computations. (a) The number of shares of common stock issued was _______________. (b) The total annual preferred stock dividend is_______________. (c) The total legal capital is ______________________. (d) The total Paid-In-Capital is_____________________. (e) The number of shares of common stock outstanding was __________. (f) The average sales price of the common stock per share when issued was $__________. (g) The cost per share of the treasury stock was $_____________. 2. The Battle Corporation is authorized to issue 25,000 shares of 6%, $100 par value preferred stock and 800,000 shares of $2 par value common stock. During 2009, its first year of operation, the company has the following stock transactions. Jan. 1 Issued 200,000 shares of common stock for cash at $5 per share. Jan. 15 Issued 6,000 shares of preferred stock for cash at $108 per share. Mar. 2 Attorneys for the company accepted 7,000 shares of common stock as payment for legal services rendered in helping the company incorporate. The legal services are estimated to have a value of $42,000. Apr. 30 Issued 50,000 shares of stock for land. The land had an asking price of $400,000. The stock is currently selling on a national exchange at $8 per share. Sept. 5 Purchased 9,000 shares of common treasury stock at $12 per share. Dec. 6 Sold 4,000 shares of the treasury stock at $13 per share. Dec. 10 Sold the remaining treasury stock for $15 per share. Dec. 31 Determined that net income for the year was $250,000. INSTRUCTIONS Journalize the transactions for Battle Corporation. 3. The following information is from the accounts of Altoona, Inc. at December 31, 2009. Common Stock, $6 par value, 500,000 shares authorized, $2,400,000 Paid-in Capital in Excess of Par Value--Common Stock 600,000 Preferred Stock, $50 par value, 10%, 50,000 shares authorized 800,000 Retained Earnings at January 1, 2009 900,000 Treasury Stock (15,000 common shares) 75,000 Paid-in Capital in Excess of Par Value--Preferred Stock 300,000 Cash dividends declared on preferred stock 20,000 Prior period adjustment that was recorded as a credit to Retained Earnings for an error discovered from 2007???? 7,000 Net income for 2009 80,000 INSTRUCTIONS a. Prepare a statement of retained earnings at December 31, 2009. b. Prepare the stockholders' equity section at December 31, 2009. 4. Prepare a 2009 income statement (in proper form!) for Carney Corporation based on the following information: Cost of goods sold $600,000 Operating expenses 100,000 Other expenses and losses 50,000 Net Sales 900,000 Tax rate 25% 5. On January 1, 2009, Allen Corporation had 200,000 shares of $5 par value common stock outstanding. On December 15, the board of directors declared a 9% stock dividend to stockholders of record On December 31, 2009, payable on January 15,2010. The market value of Allen Corporation stock was $15 per share on December 15. INSTRUCTIONS (1) Journalize the declaration of the stock dividend on December 15. (2) Journalize the distribution of the stock dividend on January 15. 6. On January 1, 2009, Micro Machines Corporation had 700,000 shares of $3 par value common stock issued and outstanding. During the year, the following transactions occurred: June 1 Declared a cash dividend of $1.75 per share to stockholders of record on June 15. June 30 Paid the cash dividend. July 1 Announced a 2-for-1 stock split to be distributed on August 1. Oct. 1 Declared a cash dividend of $0.60 per share. Dec. 31 Recorded the entry for accrued income taxes for the year,$35,000. INSTRUCTIONS Prepare journal entries if necessary to record the above transactions. 7. Grant Corp. is considering two alternatives for the financing of some high technology digital equipment. These two alternatives are: Plan A. Issue 300,000 shares of $6 par value common stock at $20 per share. Plan B. Issue $6,000,000, 5%, 20-year bonds at par. It is estimated that the company will earn $5,000,000 before Interest and taxes as a result of acquiring the digital equipment. The company has an estimated tax rate of 22% and has 200,000 shares of common stock outstanding prior to the new financing. INSTRUCTIONS a. Determine the effect on net income and earnings per share for these two methods of financing. b. Which plan should Grant accept and why? 8. On July 1, 2009, Leary Corporation issued $500,000, 12%, 10-year bonds dated July 1, 2009, at 105. The bonds pay semiannual interest on January 1 and July 1. The company uses the straight-line method of amortization and has a calendar year end. INSTRUCTIONS Prepare the journal entries that Leary Corporation would make On the following dates: a. July 1, 2009 b. December 31, 2009 c. January 1, 2010. 9. On January 1, 2009, Lerner Corporation issued $150,000, 8%, 10-year bonds, dated January 1, 2009, at 98. The bonds pay interest semiannually on January 1 and July 1. The company uses the straight-line method of amortization and has a calendar year end. INSTRUCTIONS Prepare the journal entries that Lerner Corporation would make related to the bond issue on the dates indicated below: a. January 1, 2009 b. July 1, 2009 10. Selected transactions of Eller Company are listed below. 1. Increase in accounts receivable. 2. Bonds payable are issued for cash at a premium. 3. Receipt of dividends on investment in stock. 4. Land is sold for cash at book value. 5. Purchase of treasury stock. 6. Equipment is purchased by signing a 3-year, 10% note payable. 7. Cash dividends on common stock are declared and paid. 8. 100 shares of Xerox common stock are purchased for cash. 9. Decrease in inventory. 10. Bonds payable are converted into common stock. 11. Increase in accounts payable. 12. Issued common stock for cash above par value. INSTRUCTIONS Classify each transaction as either a(n)operating activity, investing activity, financing activity, or non-cash investing and financing activity using the following code: O=Operating activity I=Investing activity F=Financing activity NC=non-cash investing and financing activity 11. The comparative balance sheets for Lang Company appear below: LANG COMPANY Comparative Balance Sheet Dec. 31, Dec. 31, 2009 2008 Assets Cash $ 61,000 $12,000 Accounts receivable 5,000 8,000 Prepaid expenses 2,000 3,000 Inventory 11,000 7,000 Land 0 0 Building 20,000 20,000 Accumulated depreciation?Bldg (3,000) (2,000) Total assets $96,000 $48,000 Liabilities and Stockholders' Equity Accounts payable $ 1,700 $ 3,200 Income Tax Payable 300 800 Bonds payable 13,000 14,000 Common stock 38,000 18,000 Retained earnings 43,000 12,000 Total liabilities and stockholders' equity $96,000 $48,000 The income statement for Lang contains the following information: Sales $143,500 Loss on sale 2,500 Cost of Goods Sold 78,000 Operating Expenses 10,000 Depreciation Expense 1,000 Income Tax Expense 2,000 Net Income $50,000 Additional information: 1. Cash dividends of $19,000 were declared and paid during the year. 2. Land costing $20,000 was acquired by issuing common stock. 3. The land in #2 was later sold for $17,500 cash. INSTRUCTIONS a. Prepare a statement of cash flows for the year ended December 31, 2009, using the indirect method. b. Compute free cash flow for 2009.

 

Paper#6463 | Written in 18-Jul-2015

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