Problem 1:
Elston Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2002, its first year of operation the company has the following stock transactions:
Jan 15 Issued 500,000 shares of stock at $5 per share
Jan 30 Attorneys for the company accepted 500 shares of common stock as payment of legal services rendered in helping the company incorporate. The legal services are estimated to have a value of $8,000
July 2 Issued 100,00 shares of stock for land. The land had an appraised value of $800,00. The stock is currently selling on a national exchange at $9 per share.
Sept 5 Purchased 10,000 shares of common stock for the treasury at $8 per share.
Dec 6 Sold 7,000 shares of the treasury stock at $10 per share.
Journalize the transactions for Elston Corporation
Problem 2:
On January 1, 2002 Dial Corporation issued 20,000 shares of $1 par value common stock for $100,000. On March 1,2002 the company purchased 2,000 shares of its common stock for $10 per share for the treasury. On June 1, 2002, 800 of the treasury shares are sold fro $13 per share. On September 1, 2002, 1,000 treasury shares are sold at $7 per share.
Journalize the stock transactions of Dial Company in 2002.
Jan 1
March 1
June 1
Sept 1
Problem 3:
Alder Company issues 1,00 shares of $100 par value, convertible preferred stock at par value. Each share is convertible into 10 shares of $1 par value common stock. Later in the year, 500 shares of the preferred stock are converted into common stock, when the market value of the two classes of stock are $101 and $13 respectively.
Journalize the entry for the issuance of the preferred stock.
Journalize the conversion of the 500 shares.
Would the entry in (b) above change if the market value were different?
Problem 4: On January 1, 2002 Dolan Corporation had 60,000 shares $1 par value common stock issued and outstanding. Beginning Retained Earnings was $1,000,000. During the year the following transactions occurred:
Mar 1 Issued 40,000 shares of common stock for $400,000 (price of $10 per share)
June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15.
June 30 Paid the $2.00 cash dividend.
July 31 Declared a 10% stock dividend payable on August 31 to stockholders of record on August 15. The fair market value of the stock on July 31 was $20 per share.
Aug 31 Paid the stock dividend
Dec 31 Net income for the year was $500,000
Prepare journal entries to record above transactions.
What is the balance in Retained Earnings at Dec 31,002?
Problem 5: On December 31, 2002, Tyler Company has $500,000 par value, 6% cumulative preferred stock outstanding and $2,000.000 of $1 par value common stock (2,000,000 shares) issued. Tyler's net income for the year is $3,000,000.
Compute earnings per share of common stock for 2002 assuming that the preferred stockholders dividend was declared and there has been no change in the number of shares of common stock outstanding during the year.