Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Part A In late 2 0 2 3 , the Nicklaus Corporation was formed. The corporate charter authorizes the Issuance of 4 , 0 0

Part A
In late 2023, the Nicklaus Corporation was formed. The corporate charter authorizes the Issuance of 4,000,000 shares of common
stock carryling a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2,
2024,2,000,000 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:
Prepare journal entries to record these transactions.
Prepare the shareholders' equlty section of the Nicklaus balance sheet as of March 31,2024.(Assume net Income for the first
quarter 2024 was $1,150,000.)
Part B
During 2024, the Nicklaus Corporation participated In three treasury stock transactions:
a. On June 30,2024, the corporation reacquires 120,000 shares for the treasury at a price of $12 per share.
b. On July 31,2024,10,000 treasury shares are relssued at $15 per share.
c. On September 30,2024,10,000 treasury shares are relssued at $10 per share.
Required:
Prepare journal entrles to record these transactions.
Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30,
(Assume net Income for the second and third quarter was $2,600,000.)
Part C
On October 1,2024, Nicklaus Corporation recelves permission to replace its $1 par value common stock shares authorized,
2,000,000 shares Issued, and 1,900,000 shares outstanding) with a new common stock Issue having a $0.50 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 recelve two shares of the
$0.50 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
Issulng corporation.)
On November 1,2024, the Nicklaus Corporation declares a $0.06 per share cash dividend on common stock and a $0.22 per share
cash dividend on preferred stock. Payment is scheduled for December 1,2024, to shareholders of record on November 15,2024.
On December 2,2024, the Nicklaus Corporation declares a 2% stock dividend payable on December 28,2024, 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(0.023,800,000) additional shares being issued to shareholders.
Requlred:
Prepare journal entries to record the declaration and payment of these stock and cash dividends.
Prepare the December 31,2024, shareholders' equlty section of the balance sheet for the Nicklaus Corporation. (Assume net
Income for the fourth quarter was $2,100,000.)
Prepare a statement of shareholders' equity for Nicklaus Corporation for 2024.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forensic Accounting And Fraud Investigation For Non-Experts

Authors: Stephen Pedneault, Frank Rudewicz, Howard Silverstone, Michael Sheetz

3rd Edition

0470879599, 9780470879597

More Books

Students also viewed these Accounting questions

Question

Compare and contrast the housing patterns of different cultures

Answered: 1 week ago

Question

Compare and contrast high- and low-load environments

Answered: 1 week ago

Question

Describe why intercultural communication competence is a necessity

Answered: 1 week ago