Financial Accounting Chapter 13: Corporation

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Name__________________________________ Date___________________________________ Lab #5 - Chapter 13 1) Brockbank Corporation was organized on July 15, 2012. The state authorized 30,000 shares of 7% noncumulative $20 par value preferred stock and 100,000 shares of $2 par value common stock. Record the journal entries for Brockbank to account for the following: a) Brockbank gave 6,000 shares of common stock to its attorney in return for her help in incorporating the business. Fees for this work was $18,000. (Note: The debit is to Legal Expense.) Date Account Debit Credit July 15 b) Brockbank gave 15,000 shares of common stock to an individual who contributed a building worth $50,000. Date Account Debit Credit July 15 Date July 15 Date July 15 c) Brockbank issued 5,000 shares of preferred stock at $25 per share. Account Debit Credit d) Peter Brockbank paid $70,000 cash for 30,000 shares of common stock. Account Debit Credit 2) Metz Motors Corporation has 2,000,000 authorized shares of $10 par value common stock. As of June 30, 2010, there were 1,000,000 shares issued and outstanding. On June 30, 2010, the board of directors declared a $0.20 per share cash dividend to be paid on August 1, 2010, to shareholders of record on July 15, 2010. Prepare the necessary entries in journal form to be recorded on (a) the date of declaration, (b) the date of record, and (c) the date of payment. (a) Date Account Debit Credit June 30 (b) Date July 15 Account Debit Credit (c) Date Aug 1 Account Debit Credit 3) Prepare in proper form the stockholders' equity section of the balance sheet from the following selected accounts and balances taken from the adjusted trial balance of Pathway Corporation on June 30, 2010. Partial Adjusted Trial Balance Account Debit Credit Common Stock$10 stated value, 50,000 shares authorized, 45,000 shares outstanding $450,000 Preferred Stock$100 par value, 8 percent cumulative convertible, 3,000 shares authorized and outstanding 300,000 Additional Paid-in Capital, Preferred 15,000 Additional Paid-in Capital, Common 75,000 Retained Earnings 30,000 Pathway Corporation Stockholders' Equity June 30, 2010 Contributed Capital: Preferred stock$100 par value, 8 percent cumulative convertible, 3,000 shares authorized and outstanding................... $ Additional paid-in capital, preferred.................................................... ____________ $ Common stock$10 stated value, 50,000 shares authorized, 45,000 shares outstanding................................................................... $ Additional paid-in capital, common...................................................... ____________ ____________ Total contributed capital......................................................................... $ Retained earnings........................................................................................ ____________ Total Stockholders' equity $___________ 4) Duncan Corporation has 2,000 shares of $100 par value, 6 percent cumulative preferred stock and 20,000 shares of $10 par value common stock outstanding. In its first four years of operation, Duncan Corporation paid cash dividends as follows: 2007, $15,000; 2008, $0; 2009, $20,000; 2010, $25,000. Calculate the total cash dividends and the dividends per share received by owners of preferred and common stock in each year. Year 2007 2008 2009 2010 Dividends Paid $15,000 -020,000 25,000 Arrears Preferred Dividends Total Per Dividend Share Common Dividends Total Per Dividend Share 5) Poquito Corporation had both the following transactions occur on the same day: a. Issued 30,000 shares of its $5 par value common stock for $360,000 cash. b. Issued 10,000 shares of its $5 par value common stock in exchange for land and a building. The building is estimated to have a market value of $90,000. Prepare the entries in journal form to record the above transactions. Account Debit Credit a. b . 6) Prepare the entries in journal form necessary to record the following stock transactions of Fitzgerald Corporation. These transactions represent all treasury stock transactions entered into by the company. June 1 Purchased 2,000 shares of its own $30 par value common stock for $70 per share, the current price. Account Debit Credit June 10 Sold 500 shares of treasury stock purchased on June 1 for $80 per share. Account Debit Credit June 20 Sold 700 shares of treasury stock purchased on June 1 for $58 per share. Account Debit Credit June 30 Retired the remaining shares purchased on June 1. The original issue price was $42 per share. Account Debit Credit