Ch. 8 #3

Homestead Oil Corp. was incorporated on January 1, 2016, and issued the following stock for cash:

810,000 shares of no-par common stock were authorized; 140,000 shares were issued on January 1, 2016, at $18.00 per share.

250,000 shares of $100 par value, 8.50% cumulative, preferred stock were authorized, and 78,000 shares were issued on January 1, 2016, at $140 per share.

Net income for the years ended December 31, 2016 and 2017, was $1,300,000 and $2,650,000, respectively.

No dividends were declared or paid during 2016. However, on December 28, 2017, the board of directors of Homestead declared dividends of $1,560,000, payable on February 12, 2018, to holders of record as of January 19, 2018.

Required:

1. Use the horizontal model for the issuance of common stock and preferred stock on January 1, 2016. (Use amounts with + for increases and amounts with for decreases.)

Balance Sheet Income Statement

Assets = Liabilities + Stockholder's Equity Net Income = Revenues-Expenses

2. Use the horizontal model for the declaration of dividends on December 28, 2017. (Use amounts with + for increases and amounts with for decreases.)

Balance Sheet Income Statement

Assets = Liabilities + Stockholder's Equity Net Income = Revenues-Expenses

Use the horizontal model for the payment of dividends on February 12, 2018. (Use amounts with + for increases and amounts with for decreases.)

Balance Sheet Income Statement

Assets = Liabilities + Stockholder's Equity Net Income = Revenues-Expenses