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Question 7 Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 40,000 shares of its common

Question 7

Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 40,000 shares of its common stock at $44 per share. On September 22, Mystic Lake Inc. sold 30,000 of the reacquired shares at $50 per share. The remaining 10,000 shares were sold at $43 per share on November 23.

Required:

Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.

What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

For what reasons might Mystic Lake have purchased the treasury stock?

Question 8

Lawn Smart Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On May 29 of the current year, Lawn Smart Inc. reacquired 18,000 shares of its common stock at $20 per share. On August 11, 13,500 of the reacquired shares were sold at $24 per share, and on October 30, 3,000 of the reacquired shares were sold at $21.

Required:

Journalize the transactions of May 29, August 11, and October 30. Refer to the Chart of Accounts for exact wording of account titles.

What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

What is the balance in Treasury Stock on December 31 of the current year?

How will the balance in Treasury Stock be reported on the balance sheet?

Question 9

The following accounts and their balances appear in the ledger of Goodale Properties Inc. on June 30 of the current year:

1	Common Stock, $45 par	$3,060,000.00
2	Paid-In Capital from Sale of Treasury Stock	115,000.00
3	Paid-In Capital in Excess of Par-Common Stock	272,000.00
4	Retained Earnings	20,553,000.00
5	Treasury Stock	324,000.00

Prepare the Stockholders Equity section of the balance sheet as of June 30. Eighty thousand shares of common stock are authorized, and 9,000 shares have been reacquired. Refer to the lists of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. Deduct will automatically appear if required.

Goodale Properties Inc.

Stockholders Equity

June 30, 20XX

1	Paid-in capital:
2
3
4
5
6
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8
9

Question 10

Sumter Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended January 31, 2016:

Retained earnings, February 1, 2015	$59,650,000
Net income	8,160,000
Cash dividends declared	1,000,000
Stock dividends declared	2,600,000

Prepare a retained earnings statement for the fiscal year ended January 31, 2016. Refer to the lists of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter all amounts as positive numbers. The word Less is not required.

Question 11

Effect of Stock Split

Gino's Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Midwest. Gino's Restaurant Corporation, which had 54,000 shares of common stock outstanding, declared a 4-for-1 stock split.

a. What will be the number of shares outstanding after the split? shares

b. If the common stock had a market price of $108 per share before the stock split, what would be an approximate market price per share after the split? $ per share

Question 12

Dividends on Preferred and Common Stock

Love Theatre Inc. owns and operates movie theaters throughout New Mexico and Utah. Love Theatre has declared the following annual dividends over a six-year period: 2011, $24,000; 2012, $72,000; 2013, $108,000; 2014, $132,000; 2015, $168,000; and 2016, $216,000. During the entire period ending December 31 of each year, the outstanding stock of the company was composed of 20,000 shares of cumulative, 3% preferred stock, $100 par, and 100,000 shares of common stock, $20 par.

Required:

1. Calculate the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears on January 1, 2011. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

		Preferred Dividends		Common Dividends
Year	Total Dividends	Total	Per Share	Total	Per Share
2011	$ 24,000	$	$	$	$
2012	72,000
2013	108,000
2014	132,000
2015	168,000
2016	216,000
			$		$

2. Calculate the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.

Average annual dividend for preferred	$ per share
Average annual dividend for common	$ per share

3. Assuming a market price per share of $199 for the preferred stock and $24 for the common stock, calculate the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share for preferred stock and for common stock.

Round your answers to two decimal places.

Preferred stock	%
Common stock	%

Check My Work2 more Check My Work uses remaining.

Question 13

The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the current fiscal year:

Preferred 1% Stock, $50 par (100,000 shares authorized, 80,000 shares issued)	$4,000,000
Paid-In Capital in Excess of ParPreferred Stock	175,000
Common Stock, $3 par (5,000,000 shares authorized, 2,000,000 shares issued)	6,000,000
Paid-In Capital in Excess of ParCommon Stock	1,500,000
Retained Earnings	32,350,000

During the year, the corporation completed a number of transactions affecting the stockholders equity. They are summarized as follows:

Jan.	5	Issued 500,000 shares of common stock at $8, receiving cash.
Feb.	10	Issued 10,000 shares of preferred 1% stock at $60.
Mar.	19	Purchased 50,000 shares of treasury common for $7 per share.
May	16	Sold 20,000 shares of treasury common for $9 per share.
Aug.	25	Sold 5,000 shares of treasury common for $6 per share.
Dec.	6	Declared cash dividends of $0.50 per share on preferred stock and $0.08 per share on common stock.
	31	Paid the cash dividends.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

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	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
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Question 14

Selected transactions completed by Primo Discount Corporation during the current fiscal year are as follows:

Jan.	9	Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,200,000 common shares outstanding.
Feb.	28	Purchased 40,000 shares of the corporations own common stock at $28, recording the stock at cost.
May	1	Declared semiannual dividends of $0.80 on 75,000 shares of preferred stock and $0.12 on the common stock to stockholders of record on June 1, payable on July 10.
Jul.	10	Paid the cash dividends.
Sep.	7	Sold 30,000 shares of treasury stock at $34, receiving cash.
Oct.	1	Declared semiannual dividends of $0.80 on the preferred stock and $0.12 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $36.
Dec.	1	Paid the cash dividends and issued the certificates for the common stock dividend.

Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

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