P 18-5 Shareholders' equity transactions; statement of shareholders' equity LO6 through LO8 Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011?2013. At December 31, 2010, the corporation's accounts included: a. November 1, 2011, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. b. On March 1, 2012, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5. c. On July 12, 2012, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). Cash was paid in lieu of fractional shares representing 250,000 equivalent whole shares. d. On November 1, 2012, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. e. On January 15, 2013, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share. f. On November 1, 2013, the board of directors declared a cash dividend of $.65 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. Required: 1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions. 2. Prepare comparative statements of shareholders' equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $330 million, $395 million, and $455 million for 2011, 2012, and 2013, respectively. P 18-12 Various shareholders' equity topics; comprehensive LO1 LO4 through LO8 Part A In late 2010, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 5,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2011, 3,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2011. (Assume net income for the first quarter 2011 was $1,000,000.) Part B During 2011, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2011, the corporation reacquires 200,000 shares for the treasury at a price of $12 per share. b. On July 31, 2011, 50,000 treasury shares are reissued at $15 per share. c. On September 30, 2011, 50,000 treasury shares are reissued at $10 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2011. (Assume net income for the second and third quarter was $3,000,000.) Part C On October 1, 2011, Nicklaus Corporation receives permission to replace its $1 par value common stock (5,000,000 shares authorized, 3,000,000 shares issued, and 2,900,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 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, 2011, the Nicklaus Corporation declares a $.05 per share cash dividend on common stock and a $.25 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2011, to shareholders of record on November 15, 2011. On December 2, 2011, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2011, 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 58,000 (.01 5,800,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2011, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,500,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2011.

Student Name: Class: Problem 18-05 Requirement 1: BRANCH-RICKIE CORPORATION General Journal Account November 1 - declaration date Debit Credit November 15 - date of record December 1 - payment date March 1 - declaration date March 13 - date of record April 5 - payment date July 12 November 1 - declaration date November 15 - date of record December 1 - payment date January 15 November 1 - declaration date November 15 - date of record December 1 - payment date Requirement 2: BRANCH-RICKIE CORPORATION Statement of Shareholders' Equity For the Years Ended December 31, 2009, 2010 and 2011 ($ in 000s) Common Stock Jan. 1, 2009 Net income Cash dividends Dec. 31, 2009 Property dividends Common stock dividend Net income Cash dividends Dec. 31, 2010 3 for 2 split effected in the form of a stock dividend Net income Cash dividends Dec. 31, 2011 Additional Paid-in Capital Total Retained Shareholders' Earnings Equity Given Data P18-05: BRANCH-RICKIE CORPORATION Common stock, 105 million shares at $1 par Paid-in - excess of par Retained earnings $105,000,000 630,000,000 970,000,000 Cash dividend declared on common shares, 11/1/2009 Bond fair market value Bond purchase price % Common stock dividend declared and distributed Market value of common stock, 7/12/2010 Equivalent whole shares Cash dividend declared on common shares, 11/1/2010 Stock split form Market value of common stock, 1/15/2011 Cash dividend declared on common shares, 11/1/2011 Net income for year 2009 Net income for year 2010 Net income for year 2011 $0.80 per share $1,600,000 $1,300,000 5% $21.00 per share $250,000 $0.80 per share 50% $22.00 $0.65 per share $330,000,000 395,000,000 455,000,000 Student Name: Class: Problem 18-12 General Journal Account January 2, 2009 Part A Cash Common stock Paid-in capital - excess of par, common January 2, 2009 Part A Cash Preferred stock Paid-in capital - excess of par, preferred Debit Credit Debit Credit Debit Credit NICKLAUS CORPORATION Balance Sheet-Shareholders' Equity Section March 31, 2009 Shareholders' equity (Part A) Preferred stock, $5 par, authorized 1,000,000 shares, issued and outstanding 1,000,000 shares Common stock, $1 par, authorized 5,000,000 shares, issued and outstanding 3,000,000 shares Paid-in capital - excess of par Retained earnings Total shareholders' equity NICKLAUS CORPORATION General Journal Account June 30, 2009 Part B Treasury stock Cash July 31, 2009 Part B Cash Treasury stock Paid-in capital - reacquired shares September 30, 2009 Part B Cash Paid-in capital - reacquired shares Treasury stock NICKLAUS CORPORATION Balance Sheet-Shareholders' Equity Section September 30, 2009 Shareholders' equity (Part B) Preferred stock, $5 par, authorized 1,000,000 shares, issued and outstanding 1,000,000 shares Common stock, $1 par, authorized 5,000,000 shares, issued 3,000,000 shares, 2,900,000 shares outstanding Paid-in capital - excess of par Paid-in capital - share repurchase Retained earnings Less: Treasury stock (100,000 shares at cost) Total shareholders' equity NICKLAUS CORPORATION General Journal Account October 1, 2009 Part C No entry November 1, 2009 Part C Retained earnings Dividends payable - common Dividends payable - preferred November 15, 2009 Part C No Entry December 1, 2009 Part C Dividends payable - common Dividends payable - preferred Cash December 2, 2009 Part C Retained earnings Common stock dividends distributable Paid-in capital - excess of par, common December 28, 2009 Part C Common stock dividends distributable Common stock NICKLAUS CORPORATION Balance Sheet-Shareholders' Equity Section December 31, 2009 Shareholders' equity (Part C) Preferred stock, $5 par, authorized 1,000,000 shares, issued and outstanding 1,000,000 shares Common stock, $.50 par, authorized 10,000,000 shares, issued 6,058,000 shares, 5,858,000 shares outstanding Paid-in capital - excess of par Paid-in capital - share repurchase Retained earnings Less: Treasury stock (100,000 shares at cost) Total shareholders' equity NICKLAUS CORPORATION Statement of Shareholders' Equity For the Year Ended December 31, 2009 ($ in 000s) Preferred Stock January 2, 2009 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, 2009 Common Stock Additional Paid-in Capital Retained Earnings Total Treasury ShareStock holders' (at cost) Equity Given Data P18-12: NICKLAUS CORPORATION Part A Common stock authorized Common stock par value Preferred stock authorized Preferred stock par value Common stock issued for cash, 1/2/2009 Common stock average price Preferred stock issued, 1/2/2009 Preferred stock price per share Part B Stock reacquired, 6/30/2009 Treasury stock cost per share Treasury stock reissued, 7/31/2009 Treasury stock cost per share Treasury stock reissued, 9/30/2009 Treasury stock cost per share Part C Common stock new par value, 10/1/2009 Common stock shares outstanding Common stock dividend declared, 11/1/2009 Preferred stock dividend declared, 11/1/2009 Declared stock dividend payable, 12/2/2009 Cost per share at declaration Additional shares issued Net income for 4th quarter 5,000,000 $1 1,000,000 $5 3,000,000 $10 1,000,000 $20 shares shares shares per share shares 200,000 shares $12 50,000 shares $15 50,000 shares $10 $0.50 2,900,000 $0.05 per share $0.25 per share 1% $10 58,000 $2,500,000