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(All work should be in excel format.) 1 On Dec 31 2017, Best Footwear Ever has outstanding $500,000 face amount, 9%, 20-year convertible bonds that
(All work should be in excel format.) | ||||||||||
1 | On Dec 31 2017, Best Footwear Ever has outstanding $500,000 face amount, 9%, 20-year convertible bonds that pay interest semiannually. After semiannual amortization on Dec. 31, 2017, the remaining bond premium is $8,000. On the first day of the next fiscal year ( January 1, 2018), 50% (half) of the bonds are converted to 750 shares of $50 par value common stock. The market value of the shares issued is $250,000. Prepare the necessary journal entry to record the conversion of the bonds. | |||||||||
2 | On January 1, 2016 Magna Refrigeration Co. had 100,000 shares of $5 par common stock outstanding. The following transactions took place during 2016. Magna Refrigeration declared and issued a 20% stock dividend on March 15. On July 1, Magna Refrigeration purchased 10,000 shares of its common stock . On October 1, Magna Refrigeration issued 14,000 shares for cash. | |||||||||
(a) What is the total number of shares outstanding as of Dec. 31 | ||||||||||
(b) What is the weighted-average number of shares outstanding as of Dec. 31 | ||||||||||
(c) On Dec 31 2016 Magna Refrigeration Co had a Net Income of $350,000 and declared preferred dividends of $85,000. Calculate the Earnings Per share for 2016 | ||||||||||
3 | As of January 2016, Magna Refrigeration Co has 6% Preferred stock, $100 par value 10,000 shares issued and outstanding; Common stock, $5 par value, 100,000 shares issued and outstanding. | |||||||||
The following dividends were declared and paid in 2016, 2017 and 2018 | ||||||||||
2015 | No dividends were declared and paid | |||||||||
2016 | $15,000 | |||||||||
2017 | $40,000 | |||||||||
2018 | $110,000 | |||||||||
a) Assuming the preferred stock were non-cumulative, how much dividends did preferred and common stockholders receive for each year dividends were declared. | ||||||||||
b) Calculate Dividend Per Share for each year | ||||||||||
c) Assuming the preferred stock were cumulative, how much dividends did preferred and common stockholders receive for each year dividends were declared. | ||||||||||
d) Calculate Dividend Per Share for each year | ||||||||||
4 | On January 1, 2017, Magna Refrigeration Corporation had 60,000 shares of $5 par value common stock issued and outstanding and 10,000 6% cumulative preferred stock issued and outstanding. During the year, the following transactions occurred: | |||||||||
1-Mar | Declared a 15% stock dividend on outstanding common stock. The market price per share as of March 1 is $17 | |||||||||
April 10. | The 15% stock dividend declared on March 1 was issued to the common stockholders. | |||||||||
May 10. | Declared a 30% stock dividend on outstanding common stock. The market price per share as of May 10 is $15 | |||||||||
30-May | The 30% stock dividend declared on May 10 was issued to the common stockholders. The market price of the shares on that date is $25 | |||||||||
5-Jun | A 2 for 1 stock split was announced for stock holders on record as of July 30. The market price of the share was $45 on June 5 | |||||||||
15-Jun | Declared a cash dividend of $2.00 per share to stockholders of record on July 15. | |||||||||
15-Aug | Paid the $2.00 cash dividend. | |||||||||
1-Sep | Declared a cash dividend to preferred stockholders of record on October 15 | |||||||||
31-Oct | Paid preferred stockholders' dividend declared on September 1. | |||||||||
Instructions | ||||||||||
a. Prepare journal entries to record each of the above transactions. If no entry is required, indicate so. | ||||||||||
b. Prepare all closing entries at year-end. |
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