15-2,15-10, and 15-11
m o llLL IS UI December 31, 2017 4) Treasury Stock Transactions and Presentation) Clemson Company had the following stockholders' equity P15-2 (L02,4) (Trea as of January 1, 2017 Common stock, $5 par value, 20,000 shares issued Paid-in capital in excess of par-common stock Retained earnings Total stockholders' equity $100,000 300,000 320,000 $720,000 During 2017, the following transactions occurred. Feb. 1 Clemson repurchased 2,000 shares of treasury stock at a price of $19 per share. Mar. 1 800 shares of treasury stock repurchased above were reissued at $17 per share. Mar. 18 500 shares of treasury stock repurchased above were reissued at $14 per share. Apr. 22 600 shares of treasury stock repurchased above were reissued at $20 per share. Instructions (a) Prepare the journal entries to record the treasury stock transactions in 2017, assuming Clemson uses the cost method. (b) Prepare the stockholders' equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,000 int for treasury stock using the cost method. proper IUF Vieano Corporation as of December 31, 2019. Account for treasure transac- for the P15-10 (L03) WRIT Four million shares stock before a ford Adjustments to the 1 WRITING (Stock Dividends and Stock Split) Oregon Inc. $10 par common stock is selling for $110 per share. shares are currently issued and outstanding. The board of directors wishes to stimulate interest in Oregon common a forthcoming stock issue but does not wish to distribute capital at this time. The board also believes that too many ats to the stockholders' equity section, especially retained earnings, might discourage potential investors. he board has considered three options for stimulating interest in the stock: es as of 1. A 20% stock dividend. 2 A 100% stock dividend. 3. A 2-for-1 stock split. Do Instructions vidends hares of income Acting as financial advisor to the board, you have been asked to report briefly on each option and, considering the board's wishes, make a recommendation. Discuss the effects of each of the foregoing options. P15-11 (LO3,4) (Stock and Cash Dividends) Earnhart Corporation has outstanding 3,000,000 shares of common stock with a par value of $10 each. The balance in its Retained Earnings account at January 1, 2017, was $24,000,000, and it then had Paid-in Capital in Excess of Par-Common Stock of $5,000,000. During 2017, the company's net income was $4,700,000. A cash dividend of 50.60 a share was declared on May 5, 2017, and was paid June 30, 2017, and a 6% stock dividend was declared on November 30, 2017, and distributed to stockholders of record at the close of business on December 31, 2017. You have been asked to advise on the proper accounting treatment of the stock dividend. The existing stock of the company is quoted on a national stock exchange. The market price of the stock has been as follows. October 31, 2017 November 30, 2017 534 December 31, 2017 $38 neously 30 cents $31 balance (c) Prepare heet of Earnesting forth the Instructions (a) Prepare the journal entry to record the declaration and payment of the cash dividend. (b) Prepare the journal entry to record the declaration and distribution of the stock dividend. (d Prepare the stockholders' equity section (including schedules of retained earnings and additional paid-in capital) of the balance sheet of Earnhart Corporation for the year 2017 on the basis of the foregoing information. Draft a note to the financial statements setting forth the basis of the accounting for the stock dividend, and add separately appropriate comments or explanations regarding the basis chosen P15-12 (LO1,2,3,4) (An 3.4) (Analysis and Classification of Equity Transactions) Penn Company was formed on July 1, 2015. It issue 300,000 shares of $10 par value common stock and 100,000 shares of 8% $25 par value, cumulative and Was authorized to issue rred stock. Penn Company has a July 1-June 30 fiscal year. honparticipating preferred stock. lenn Company has al formation relates to the stockholders' equity accounts of Penn Company. llauring intorno
