ACC 291 WEEK 4 INDIVIDUAL ASSIGNMENT – EXERCISES

ACC 291 WEEK 4 INDIVIDUAL ASSIGNMENT – EXERCISES

Complete Problem 11-6A.

E11-15

Before Action After Stock Dividend After Stock Split
Stockholders’ equity
Paid-in capital
Common stock $600,000 $630,000 $600,000
In excess of par value 0 3,000 x ($14-$10)=
12,000

0
Total paid-in capital 600,000 642,000 600,000
Retained earnings 900,000 $900,000-(3,000 x $14)
858,000

900,000
Total stockholders’
equity

1,500,000$ $1,500,000 $1,500,000
Outstanding shares 60,000 63,000 120,000
Book value per share $25.00 $23.81 $12.50
P11-6A

(a) Prepare the journal entries for the:

(1) Issuance of preferred stock for land.
Land 296,000
Preferred Stock 240,000 (2,400 x $100)
Paid-in Capital in Excess of Par Value—Preferred 56,000

(2) Issuance of common stock for cash.
Cash 7,700,000 ($2,000,000 + $5,700,000)
Common Stock2,000,000 (400,000 x $5)
Paid-in Capital in Excess of Stated Value—Common 5,700,000

(3) Purchase of common treasury stock for cash.
Treasury Stock 33,000 (1,500 x $22)
Cash 33,000

(4) Sale of treasury stock for cash.
Cash 14,000 (500 x $28)
Common Treasury Stock 11,000 (500 x $22)
Paid-in Capital from Treasury Stock 3,000 (500 x $6)

(b) Prepare the stockholders’ equity section at December 31, 2011.