A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of $10, $100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per share dividends for each class of stock for each year by completing the schedule. Preferred Common Year Dividends Total Per Share Total Per Share 1 $10,000 _________ _________ _________ _________ 2 25,000 _________ _________ _________ _________ 3 60,000 _________ _________ _________ _________ 2. Selected transactions completed by Breezeway Construction during the current fiscal year are as follows: February 3 Split the common stock 2 for 1 and reduced the par from $40 to $20 per share. After the split there were 250,000 common shares outstanding. April 10 Declared semiannual dividends of $1.50 on 18,000 shares of preferred stock and $0.08 on the common stock to stockholders of record on May 10, payable on June 9. June 9 Paid the cash dividends. October 10 Declared semiannual dividends of $1.50 on the preferred stock and $0.04 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $36. December 9 Paid the cash dividends and issued the certificates for the common stock dividend. Required: Journalize the transactions. 3. Sorenson Co., is considering the following alternative plans for financing their company: Plan I Plan II Issue 10% Bonds (at face) - $3,000,000 Issue $10 par Common Stock $4,000,000 $1,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000. 4. Journalize the entries to record the following selected bond investment transactions for Southwest Bank: (1) Purchased $400,000 of Daytona Beach 5% bonds at 100 plus accrued interest of $4,500. (2) Received the first semiannual interest. (3) Sold $250,000 of the bonds at 97, plus accrued interest of $1,800. 5. During 2012, its first year of operations, Makala Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Oceanna Company 700 $29,000 Rockledge, Inc. 1,900 41,000 Assume that as of December 31, 2012, the Oceanna Company stock had a market value of $49 per share and Rockledge, Inc. stock had a market value of $20 per share. Makala had 10,000 shares of no par stock outstanding that was issued for $150,000. For the year ending December 31, 2012, Makala had a net income of $105,000. No dividends were paid. Required: (1) Prepare the Current Assets section of the balance sheet presentation for the available-for sale securities as of December 31, 2012. (2) Prepare the Stockholders Equity section of the balance sheet as of December 31, 2012. 6. Durrand Corporations accumulated depreciation increased by $12,000, while patents decreased by $2,200 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $4,300 from sale of land. Reconcile a net income of $65,000 to net cash flow from operating activities. 7. Dorman Company reported the following data: Net income $225,000 Depreciation expense 25,000 Gain on disposal of equipment 20,500 Decrease in accounts receivable 14,000 Decrease in account payable 3,600 Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method. 8. A company reports the following: Net income $350,000 Preferred dividends $50,000 Average stockholders equity $1,000,000 Average common stockholders equity $800,000 Determine the (a) rate earned on stockholders equity, and (b) rate earned on common stockholders equity. Round your answer to one decimal place. 9. On the first day of the current fiscal year, $2,000,000 of 10-year, 7% bonds, with interest payable annually, were sold for $2,125,000. Present entries to record the following transactions for the current fiscal year: (a) Issuance of the bonds. (b) First annual interest payment. (c) Amortization of bond premium for the year, using the straight-line method of amortization. 10. Revenue and expense data for Martinez Company are as follows: 2012 2011 Administrative expenses $37,000 $20,000 Cost of goods sold 350,000 320,000 Income tax 40,000 32,000 Net sales 800,000 700,000 Selling expenses 150,000 110,000 (a) Prepare a comparative income statement, with vertical analysis, stating each item for both 2012 and 2011 as a percent of sales. (b) Comment upon significant changes disclosed by the comparative income statement. Round percentage to one decimal place