Question 2:
1. At December 31, 2018, Northeast Corporation reported the stockholders' equity accounts shown here (with dollar amounts in millions, except per-share amounts). (Click the icon to view the data.) Northeast's 2019 transactions included 21Click the icon to view the transactions.) Requirements 1. Journalize Northeast's transactions in parts b, c, d, and e. Explanations are not required. 2. What was the overall effect of these transactions (parts a-e) on Northeast's stockholders' equity? Requirement 1. Journalize Northeast's transactions in b, c, d, and e. Explanations are not required. (Enter amounts in millions as provided to you in the problem statement. Record debits first, then credits. Exclude explanations from any journal entries.) b. b. Issuance of 4 million shares of common stock for $14.50 per share. Journal Entry Accounts Date Debit Credit b. (1) (2) (3) (4) c. Purchase of 5 million shares of treasury stock for $60 million. Journal Entry Accounts Date Debit Credit c. (5) (6) (7) (7 (8) ) Credit d. Sold 4 million of the treasury shares purchased in partc for $56 million Journal Entry Date Accounts Debit d. d. (9) (10) | (11) |(12) . 1. Declaration and payment of cash dividends of $31 million. Journalize the declaration of the dividend only. You will prepare the journal entry for the payment of the dividend next. Journal Entry Accounts Debit Credit Date e 1. (13) |(14) (15) |) (16) e 2. Declaration and payment of cash dividends of $31 million. Now journalize the payment of the cash dividends. . Journal Entry Accounts Date Debit Credit e 2. |(17) (18) (19) (20) Requirement 2. What was the overall effect of these transactions (parts a through e) on Northeast's stockholders' equity? The overall net effect on stockholders' equity is a (21) of $ Requirement 2. What was the overall effect of these transactions (parts a through e) on Northeast's stockholders' equity? The overall net effect on stockholders' equity is a (21) of $ 1: Data Table $ 104 Common stock, $4.00 par value per share, 26 million shares issued Paid-in capital in excess of par value Retained earnings 13 260 (10) Treasury stock, at cost $ 367 Total stockholders' equity 2: More Info a. Net income, $451 million b. Issuance of 4 million shares of common stock for $14.50 per share c. Purchase of 5 million shares of treasury stock for $60 million d. Sold 4 million of the treasury shares purchased in partc for $56 million e. Declaration and payment of cash dividends of $31 million 2. Beautiful Outdoor Furniture Company included the following stockholders' equity on its year-end balance sheet at March 31, 2019: (Click the icon to view the partial balance sheet.) Read the requirements Requirement 1. Identify the different issues of stock that Beautiful Outdoor Furniture Company has outstanding. (If a box is not used in the table, leave the box empty; do not make a selection.) Issue of stock (1) (2) (3) (4) Requirement 2. Give the summary entries to record issuance of all the Beautiful stock. Assume that all the stock was issued for cash. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries.) Record issuance of the Class A Preferred Stock. Journal Entry Accounts Date Debit Credit (5) (6) (7) (8) Record issuance of the Class B Preferred Stock. Journal Entry Accounts Date Debit Credit (9) (10) (11) (12) Record issuance of the Common Stock. Journal Entry Accounts Date Debit Credit (13) (14) (15) (16) Requirement 3. Suppose Beautiful passed its preferred dividends for three years. Would the company have to pay those dividends in arrears before paying dividends to the common stockholders? Give your reason. Beautiful Outdoor Furniture Company (17) have to pay preferred dividends in arrears before paying dividends to the common stockholders because the preferred stock is (18) Requirement 4. What amount of preferred dividends must Beautiful declare and pay each year to avoid having preferred dividends in arrears? Beautiful must declare and pay dividends of $ each year to avoid having preferred dividends in arrears. Requirement 5. Assume that preferred dividends are in arrears for 2018. Journalize the declaration of an $840,000 dividend on February 28, 2019. An explanation is not required. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Accounts Date Debit Credit Feb 28 (19) (20) (21) (22) 1: Data Table Amount $ 1,900,000 2,400,000 Stockholders' Equity Preferred stock, 3% cumulative-par value $25 per share; authorized 100,000 shares in each class Class A-issued 76,000 shares Class B-issued 96,000 shares Common stock-$1 par value: authorized 1,600,000 shares, issued 280,000 shares Additional paid-in capital-common 280,000 5,560,000 8,410,000 Retained earnings $ 18,550,000 2: Requirements 1. Identify the different issues of stock that Beautiful Outdoor Furniture Company has outstanding. 2. Give the summary entries to record issuance of all the Beautiful stock. Assume that all the stock was issued for cash. Explanations are not required. 3. Suppose Beautiful passed its preferred dividends for three years. Would the company have to pay those dividends in arrears before paying dividends to the common stockholders? Give your reason. 4. What amount of preferred dividends must Beautiful declare and pay each year to avoid having preferred dividends in arrears? 5. Assume that preferred dividends are in arrears for 2018. Journalize the declaration of an $840,000 dividend on March 31, 2019. An explanation is not required
