In late 2015, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2016, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share.

requirements are attached

2/21/2016 Chapter 18 Homework Cherry Park Acct 4050 Intermediate Acct spr 2016 02: Stephenson Acct 4050 02 Spring 16 Chapter 18 Homework 4. instructions | help value: 10.00 points Part A In late 2015, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2016, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.) view transaction list view general journal Journal Entry Worksheet 1 2 Record issue of common shares. Date General Journal January 02 Debit Cash Credit 40,000,000 Common stock Paidin capitalexcess of par, common *Enter debits before credits done clear entry record entry 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2016. (Assume net income for the first quarter 2016 was $1,750,000.) http://ezto.mheducation.com/hm.tpx 1/5 2/21/2016 Chapter 18 Homework NICKLAUS CORPORATION Balance Sheet Shareholders' Equity Section March 31, 2016 Shareholders' equity Total shareholders' equity Part B During 2016, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2016, the corporation reacquires 250,000 shares for the treasury at a price of $12 per share. b. On July 31, 2016, 25,000 treasury shares are reissued at $15 per share. c. On September 30, 2016, 25,000 treasury shares are reissued at $10 per share. Required: 1. Prepare journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list view general journal Journal Entry Worksheet 1 2 3 Record acquisition of treasury stock. Date June 30 General Journal Debit Treasury stock Credit 3,000,000 Cash 3,000,000 *Enter debits before credits done clear entry record entry 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2016. (Assume net income for the second and third quarter was $3,250,000.) http://ezto.mheducation.com/hm.tpx 2/5 2/21/2016 Chapter 18 Homework NICKLAUS CORPORATION Balance Sheet Shareholders' Equity Section September 30, 2016 Shareholders' equity Total shareholders' equity Part C On October 1, 2016, Nicklaus Corporation receives permission to replace its $1 par value common stock (6,000,000 shares authorized, 4,000,000 shares issued, and 3,800,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is onehalf the amount of the old, this represents a 2for1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2016, the Nicklaus Corporation declares a $0.18 per share cash dividend on common stock and a $0.35 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2016, to shareholders of record on November 15, 2016. On December 2, 2016, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2016, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 76,000 (0.01 7,600,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) http://ezto.mheducation.com/hm.tpx 3/5 2/21/2016 Chapter 18 Homework view transaction list view general journal Journal Entry Worksheet 1 2 3 4 5 6 Record the entry for a 2for1 stock split. Date General Journal Debit Credit October 01 *Enter debits before credits done clear entry record entry 2. Prepare the December 31, 2016, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,750,000.) NICKLAUS CORPORATION Balance Sheet Shareholders' Equity Section December 31, 2016 Shareholders' equity Total shareholders' equity 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2016. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.) http://ezto.mheducation.com/hm.tpx 4/5 2/21/2016 Chapter 18 Homework NICKLAUS CORPORATION Statement of Shareholders' Equity for the Year Ended Dec. 31, 2016 ($ in 000s) Additional Total Preferred Common Paidin Retained Treasury Shareholders' Stock Stock Capital Earnings Stock Equity Jan. 2, 2016 Issuance of preferred stock Issuance of common stock Purchase of treasury stock Sale of treasury stock Net income Common cash dividends Preferred cash dividends Stock dividend December 31, 2016 References eBook & Resources General Journal Learning Objective: 1804 Record the issuance of shares when sold for cash and for noncash consideration. Learning Objective: 1807 Explain the basis of corporate dividends, including the similarities and differences between cash and property dividends. Difficulty: 3 Hard Learning Objective: 1805 Distinguish between accounting for retired shares and for treasury shares. Learning Objective: 1808 Explain stock dividends and stock splits and how we account for them. Learning Objective: 1801 Describe the components of shareholders' equity and explain how they are reported in a statement of shareholders' equity. Learning Objective: 1806 Describe retained earnings and distinguish it from paid in capital. Check my work 2016 McGraw-Hill Education. All rights reserved. http://ezto.mheducation.com/hm.tpx 5/5