ACC – Pr. 15-143, 15-145, 15-147, 17-114 Problems

Pr. 15-143—Treasury stock transactions.The original sale of the $50 par value common shares of Gray Company was recorded as follows:Cash 290,000Common Stock 250,000Paid-in Capital in Excess of Par 40,000
InstructionsRecord the treasury stock transactions (given below) under the cost method:
Transactions:(a) Bought 300 shares of common stock as treasury shares at $62.(b) Sold 80 shares of treasury stock at $60.(c) Sold 40 treasury shares at $68.
Solution 15-143
Date Account Name Ref Debit Credita
Pr. 15-145—Equity transactions.Foley Corporation has the following capital structure at the beginning of the year:
6% Preferred stock, $50 par value, 20,000 shares authorized, 6,000 shares issued and outstanding $ 300,000Common stock, $10 par value, 60,000 shares authorized, 40,000 shares issued and outstanding 400,000Paid-in capital in excess of par 110,000Total paid-in capital 810,000Retained earnings 440,000Total stockholders’ equity $1,250,000
(a) Record the following transactions which occurred consecutively (show all calculations).1. A total cash dividend of $90,000 was declared and payable to stockholders of record. Record dividends payable on common and preferred stock in separate accounts.2. A 10% common stock dividend was declared. The average market value of the common stock is $18 a share.3. Assume that net income for the year was $150,000 (record the closing entry) and the board of directors appropriated $70,000 of retained earnings for plant expansion.
(b) Construct the stockholders’ equity section incorporating all the above information.
Solution 15-145(a)Date Account Name Ref Debit Credit1

Show Computation for Transaction #2
Solution 15-145 (cont.)
Show computation for Retained Earnings – Unappropriated:*Pr. 15-146—Dividends on preferred and common stock.Rensing, Inc., has $800,000 of 8% preferred stock and $1,200,000 of common stock outstanding, each having a par value of $10 per share. No dividends have been paid or declared during 2009 and 2010. As of December 31, 2011, it is desired to distribute $488,000 in dividends.
InstructionsHow much will the preferred and common stockholders receive under each of the following assumptions:(a) The preferred is noncumulative and nonparticipating.(b) The preferred is cumulative and nonparticipating.(c) The preferred is cumulative and fully participating.(d) The preferred is cumulative and participating to 12% total.
Solution 15-146(a) Preferred Common Total(b) Preferred Common Total(c) Preferred Common Total(d) Preferred Common Total
Pr. 15-147—Basic EPS.Assume that the following data relative to Kane Company for 2010 is available:Net Income $2,100,000
Transactions in Common Shares Change CumulativeJan. 1, 2010, Beginning number 700,000Mar. 1, 2010, Purchase of treasury shares (60,000) 640,000June 1, 2010, Stock split 2-1 640,000 1,280,000Nov. 1, 2010, Issuance of shares 120,000 1,400,000
8% Cumulative Convertible Preferred StockSold at par, convertible into 200,000 shares of common (adjusted for split). $1,000,000
Instructions(a) Compute the basic earnings per share for 2010. (Round to the nearest penny.)
Solution 15-147Computation of weighted average shares outstanding during the year:Date Activity Description Number of SharesJanuary 1 Outstanding Shares
(a) Basic Earnings per share:
Pr. 17-114—Trading equity securities.Gordon Company has the following securities in its portfolio of trading equity securities on December 31, 2007:Cost Fair Value5,000 shares of Milner Corp., Common $155,000 $139,00010,000 shares of Eddy, Common 182,000 190,000$337,000 $329,000All of the securities had been purchased in 2007. In 2008, Gordon completed the following securities transactions:March 1 Sold 5,000 shares of Milner Corp., Common @ $31 less fees of $1,500.April 1 Bought 600 shares of Yount Stores, Common @ $45 plus fees of $550.The Gordon Company portfolio of trading equity securities appeared as follows on December 31, 2008:Cost Fair Value10,000 shares of Eddy, Common $182,000 $195,500600 shares of Yount Stores, Common 27,550 25,500$209,550 $221,000
Instructions: Prepare the general journal entries for Gordon Company for:(a) the 2007 adjusting entry. (c) the purchase of the Yount Stores’ stock.(b) the sale of the Milner Corp. stock. (d) the 2008 adjusting entry
Solution 17-114Date Account Name Ref Debit Credit(a)
Show Computation for Transaction (a)
(b) Account Name Ref Debit Credit
Show Computation for Transaction (b)
(c) Account Name Ref Debit Credit
Show Computation for Transaction (c)
(d) Account Name Ref Debit Credit
Show Computation for Transaction (d)

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