Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PART 1 Lusaka, Inc. has 25,000 shares issued and outstanding. The shares were issued at $20 per share. Par value is $1 per share. On
PART 1
Lusaka, Inc. has 25,000 shares issued and outstanding. The shares were issued at $20 per share. Par value is $1 per share. On Dec. 12,Lusaka repurchases 10,000 shares for cash of $18 per share.
- What values would be shown on Lusaka's balance sheet for the issued shares prior to the repurchase?
- Common stock:
- Additional paid-in capital:
- Record the journal entry for the share repurchase choosing from the following account abbreviations: CASH = cash; CS = common stock; RE = retained earnings; TS = treasury stock; APIC = additional paid-in capital.
- Debit:
- Credit:
- Calculate the total book value of common stock shares after the share repurchase:
- How many shares are outstanding after the repurchase?
- On Dec. 15, Lusaka declares a cash dividend of $1.25 per share to be paid on Jan. 25. What is the total amount of cash dividend that Lusaka will pay on Jan. 25? Hint: first determine the number of shares outstanding. Enter your answer without a $.
PART 2
For each activity described for the Flanders Co., indicate whether the cash flow is operating (O), investing (I), financing (F), or no cash flow (N).
- Flanders purchases inventory with cash.
- Flanders purchases a machine with cash.
- Flanders acquires a machine by signing a note payable.
- Flanders prepays an insurance policy that is effective for the next six months.
- Flanders borrows $10,000 through a small business loan.
- Flanders receives cash from a prior sale on account.
- Flanders acquires inventory on account.
- Flanderss employees work and earn $170,000 during July. Some wages are paid in July, and some remain payable at the end of the month.
- Flanders makes an interest payment related to the note payable in (c).
- Flanders issued a bond five years ago. Now the bond has matured and Flanders pays the face value.
- Flanders pays a dividend to shareholders.
- Flanders sells a delivery truck, reporting a gain of $2,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started