Problem 1} YALE GROUP EQUITY PROBLEM 25 points

YALE Group has the following items in its current balance sheet:

Common Stock 5,000,000 shares authorized, 1,200,000 issued $6,000,000

Capital Surplus $3,600,000

Treasury Stock on Common 100,000 shares $1,320,000

Cumulative Preferred Stock 17,000,000 authorized {8%} $2 par $12,000,000

Retained Earnings $30,180,000

1. YALE Group wishes to announce a total cash dividend of $4,000,000. How is this dividend to be split between the common and preferred stockholders?

2. Suppose YALE Group was five years in the arrears in paying the dividend to the preferred stockholders: Dividend payout amount is $10,000,000.

then what is the total dollar amount of the preferred and common shareholder dividend?

3. How many shares of YALE Group common stock are outstanding?

4. How many shares of YALE Group preferred stock are outstanding?

5. What was the average selling price of YALE Groups common stock shares that are listed on the current balance sheet.?

6. What was the average selling price of YALE Groups preferred stock shares that are on the current balance sheet?

7. If YALE Group announces a 4 for 1 stock split of the cumulative preferred, then what is the new total amount of the preferred stock?

8. If YALE Group were to provide for a 10% common stock dividend, then how many new shares are to be mailed to existing shareholders?

9. Assume in question [8] the market price of the common stock was $20 at the time of the stock dividend announcement. What is the journal entry to record the stock dividend?

10. Explain the concept of the reverse stock split.

PROBLEM 2A} DEPRECIATION 15 POINTS

OMAHA Inc., a calendar year company, purchased on June 29, 2019 a tractor trailer for transporting racehorses. The cost of the trailer was $200,000 and is estimated to have a useful life of five years and salvage value is to be ignored. What would be the depreciation expense during the entire useful life of the asset?

Straight Line;

Sum-of-the-Years digits;

Double Declining Balance?

PROBLEM 2B DEPRECIATION 10 POINTS

Using the facts provided in Part A above, what would be the journal entry for the sale of the truck if the truck was sold on December 31, 2021 for the amount of $185,000? PLEASE USE the STRAIGHT LINE DEPRECIATION method for the computation of your journal entry.

PROBLEM 3} HUSKY INVENTORY 20 POINTS

Yale Lead has had the following inventory entries in the month of December.

Beginning Inventory 1000 units @ $10 each

Dec. 1 Purchased 3,000 units @ $15 each

Dec. 5 Purchased 4,000 units @ $20 each

Dec 12 Purchased 6,000 units @ 30 each

Dec 20 Purchased 12,000 units @ 28 each

Sold 3,000 units on Dec. 7 for $100 each

Sold 6,000 units on Dec. 14 for $350 each

1. Using FIFO Perpetual determine the cost of goods sold for Yale Lead.
2. Using LIFO Perpetual determine the cost of goods sold for Yale Lead.
3. Using FIFO Periodic determine ending inventory.
4. Using Weighted Average periodic determine the gross margin for Husky.
5. Determine the Cost of Goods Available for Husky.

PROBLEM 4 YALE-WB Bad Debts 10 POINTS

You are to determine the adjusting journal for bad debt expense using the listed information below for Crimson Inc.:

Account receivable for Crimson Inc. at the end of December 31, 2018 totals $200,000. This balance is due to four customers not paying their bill by the end of the year. James owes $50,000; Fred owes $64,000; Bernie owes 36,000; and Terry owes $50,000. The probabilities of James not paying has been determined to be 20% and Fred, Bernie, and Terry were each assessed a 10% probability.

If the balance in the allowance for doubtful accounts has a debit balance of $10,000 then what would be the adjusting entry to needed to update Crimson Inc.s books?