Part A In late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 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, 2021, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $12 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $30 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, 2021. (Assume net income for the first quarter 2021 was $1,300,000.)
Part B During 2021, the Nicklaus Corporation participated in three treasury stock transactions:
- On June 30, 2021, the corporation reacquires 150,000 shares for the treasury at a price of $14 per share.
- On July 31, 2021, 25,000 treasury shares are reissued at $17 per share.
- On September 30, 2021, 25,000 treasury shares are reissued at $12 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, 2021. (Assume net income for the second and third quarter was $2,750,000.)
Part C On October 1, 2021, Nicklaus Corporation receives permission to replace its $1 par value common stock (4,000,000 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 receive 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 issuing corporation. On November 1, 2021, the Nicklaus Corporation declares a $0.09 per share cash dividend on common stock and a $0.26 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2021, to shareholders of record on November 15, 2021.
On December 2, 2021, the Nicklaus Corporation declares a 3% stock dividend payable on December 28, 2021, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $12 per share. The dividend will result in 114,000 (0.03 3,800,000) 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, 2021, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,250,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021.
Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required i Part C Required 2 Part C Required 3 Part C 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.) No Credit Date January 02 Debit 24,000,000 General Journal Cash Common stock Paid-in capital - excess of par, common 2,000,000 22,000,000 January 02 30,000,000 Cash Preferred stock Paid-in capital - excess of par, preferred 5,000,000 25,000,000 Required 1 Part A Required 2 Part A > Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required 1 Part C Required 2 Part C Required 3 Part C Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021. (Assume net income for the first quarter 2021 was $1,300,000.) NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section March 31, 2021 Shareholders' equity Common stock $ 2,000,000 Preferred stock 5,000,000 Paid-in capital - excess of par 22,000,000 X Retained earnings 1,000,000 X Total shareholders' equity $ 30,000,000 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required 1 Part C Required 2 Part C Required 3 Part C 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.) General Journal Credit No 1 Date June 30 Debit 2,100,000 Treasury stock Cash 2,100,000 July 31 425,000 Cash Treasury stock Paid-in capital - excess of par, common 300,000 125,000 September 30 Cash Paid-in capital - excess of par, common Treasury stock 300,000 50,000 350,000 Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Required i Part B Required 2 Part B Required 1 Part C Required 2 Part C Required 3 Part C Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2021. (Assume net income for the second and third quarter was $2,750,000.) NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section September 30, 2021 Shareholders' equity Common stock $ 2,000,000 Preferred stock 5,000,000 Paid-in capital - excess of par 22,000,000 Retained earnings 1,000,000 $30,000,000 Less: Treasury stock Total shareholders' equity $30,000,000 x Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required i Part C Required 2 Part C Required 3 Part C 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.) No Debit Credit Date October 01 General Journal No journal entry required November 01 342,000 Retained earnings Cash dividends payable, common 342,000 3 November 15 > 260,000 Retained earnings Cash dividends payable, common 260,000 December 01 Cash dividends payable, common Cash December 02 Retained earnings 1,368,000 Common stock dividends distributable Paid-in capital - excess of par, common ODO 57,000 1,425,000 % 6 December 28 Common stock dividends distributable Common stock Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required 1 Part C Required 2 Part C Required 3 Part C Prepare the December 31, 2021, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,250,000.) NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section December 31, 2021 Shareholders' equity Common stock Preferred stock 5,000,000 Paid-in capital - excess of par Treasury stock Retained earnings $ 5,000,000 Total shareholders' equity $ 5,000,000 Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required 1 Part C Required 2 Part C Required 3 Part C Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021. (Amounts to be deducted should be indicated with minus sign. Enter your answers in thousands.) NICKLAUS CORPORATION Statement of Shareholders' Equity For the Year Ended Dec. 31, 2021 (S in thousands) Additional Common Paid-in Retained Stock Capital Earnings Preferred Stock Treasury Stock Total Shareholders Equity Jan. 2, 2021 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, 2021 0
