WEEK 5 FINAL EXAM

Brief Exercise 15-1

Buttercup Corporation issued 300 shares of $10 par value common stock for $4,500.

Prepare Buttercup’s journal entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)

Account Titles and Explanation
Debit
Credit
   

   
$

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Warning

 

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Brief Exercise 15-10

Woolford Inc. declared a cash dividend of $1.00 per share on its 2 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15.

Prepare all journal entries necessary on those three dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)

Date
Account Titles and Explanation
Debit
Credit
Aug. 1
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Aug. 15
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Sep. 9
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Brief Exercise 15-4

Ravonette Corporation issued 300 shares of $10 par value common stock and 100 shares of $50 par value preferred stock for a lump sum of $13,500. The common stock has a market price of $20 per share, and the preferred stock has a market price of $90 per share.

Prepare the journal entry to record the issuance. (Round answers to 0 decimal places, e.g., 1520. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)

Account Titles and Explanation
Debit
Credit
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Exercise 15-21

The outstanding capital stock of Edna Millay Corporation consists of 2,000 shares of $100 par value, 8% preferred, and 5,000 shares of $50 par value common.

Assuming that the company has retained earnings of $90,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.

(a) The preferred stock is noncumulative and nonparticipating. (Round answers to 0 decimal places, e.g. $38,487.)

Preferred
 
Common
$

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  $

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(b) The preferred stock is cumulative and nonparticipating. (Round answers to 0 decimal places, e.g. $38,487.)

Preferred
 
Common
$

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  $

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(c) The preferred stock is cumulative and participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 0 decimal places, e.g. $38,487.)

Preferred
 
Common
$

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  $

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Exercise 15-22

Matt Schmidt Company’s ledger shows the following balances on December 31, 2014.

7% Preferred Stock—$10 par value, outstanding 20,000 shares   $ 200,000
Common Stock—$100 par value, outstanding 30,000 shares   3,000,000
Retained Earnings   630,000

Assuming that the directors decide to declare total dividends in the amount of $366,000, determine how much each class of stock should receive under each of the conditions stated below. One year‘s dividends are in arrears on the preferred stock.

(a) The preferred stock is cumulative and fully participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 0 decimal places, e.g. $38,487.)

Preferred
 
Common
$

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  $

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(b) The preferred stock is noncumulative and nonparticipating. (Round answers to 0 decimal places, e.g. $38,487.)

Preferred
 
Common
$

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  $

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(c) The preferred stock is noncumulative and is participating in distributions in excess of a 10% dividend rate on the common stock. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 0 decimal places, e.g. $38,487.)

Preferred
 
Common
$

[removed]
  $

[removed]

Warning

 

[removed] Don’t show me this message again for the assignment