1. For each of the following independent situations, present the necessary journal entry: (a) Declared and distributed a 5% share dividend on 100,000 shares of common shares outstanding. Market price per share on this date was $12. (b) With 250,000 shares of common shares outstanding, declared and distributed a 2 for 1 share split. (c) Declared and distributed a 20% share dividend on 100,000 shares of common shares outstanding. Market price per share on this date was $11.
2. Diego Corp received its charter and began business in 2020. The company was authorized to issue 20,000, $5, noncumulative preferred shares and an unlimited number of common shares. Prepare journal entries to record the following transactions that occurred during 2020: Sep-01 Honoured a $55,000, 12%, 120 note payable, in exchange for 800 preferred shares. Oct-12 Sold 1,500 preferred shares for $70 per share, cash. Nov-03 Sold 2,000 common shares at $22 per share.
3. The partners of the Blue Tooth Partnership agree to liquidate. After all liabilities of $100,000 are paid, the capital account balances are: Wong, $80,000; Winslow, $70,000; and Peters, ($4,000). Prepare the journal entries required to end the partnership in the following situations: a. Peters agrees to pay $4,000 in cash to settle his deficiency. b. Peters is unable to pay his capital deficiency
4. Write notes on the following a. Stock Split b. Preferred Share c. Accounting Information System
5. Ms. X plans to leave the JT Partnership. At this time her capital account is $48,000. The remaining partners, Ms. Y and Ms. Z, agree to pay Ms. X $58,000. Prepare the journal entry to record the withdrawal. Assume the partners have no agreement for sharing profits and losses.