Question 1: Journalize the following transactions.
A) Issued 100,000 shares of $1 par common stock for $10 per share.
B) Issued 300 shares of $25 par preferred stock with a fair value of $30 per share to an attorney in payment of legal fees for organizing the corporation
C) Declared a stock dividend of 7,000 shares of $1 par common stock;
Fair market value is $15 per share
D) Issued stock dividend declared above.
E) Sold all 500 shares of treasury stock that was originally purchased at $9 for $15, receiving cash
F) Acquired 5000 shares of treasury stock for $20 per share. It had originally became $1 par common stock issued at $10 per share
G) Declared a cash dividend on common stock
H) Sold 2000 shares of the above treasury stock for $22 per share.
Question 2: Journalize the entries to record the following selected transactions of Warners Co.:
a) Purchased $100,000 of Brothers Co. 8% bonds at 102 plus accrued interest of $2,000.
b) Received first semiannual interest payment
c) Amortized $40 on the bond investment at the end of the first year.
d) Sold the bonds at 97 plus accrued interest of $1,500. The bonds were carried at $101,500 at the time of the sale.
e) Issued $3,250,000 of 10-year, 8% bonds at 97.
f) Amortized bond discount for a full year, using the straight-line method.
g) Called bonds at 98. The bonds were carried at $3,175,500 at the time of the redemption.
Question 3: Present entries to record the following summarized operations related to production for a company using a job order cost system:
a) Materials purchased on account $167,000
b) Prepaid expenses incurred on account 12,200
c) Materials requisitioned:
For production order 153,700
For general factory use 2,700
d) Factory labor used:
On production orders 141,300
For general factory purposes 12,000
e) Depreciation on factory equipment 37,000
f) Expiration of prepaid expenses,
Chargeable to factory 6,100
g) Factory overhead costs incurred on account 67,000
h) Factory overhead applied, based on machine hours 105,300
i) Jobs finished 415,300
j) Jobs shipped to customers: cost, $412,000; selling price 638,000