Acc 423 Week 2 Wileyplus Assignment - Exercises

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ACC 423 Week 2 WileyPlus Assignment - Exercises
Business - Accounting

E15-13 (a,b) (Stock Split and Stock Dividend)
The common stock of Warner Inc. is currently selling at $110 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Five million shares are issued and outstanding.

(a) How much is the debit to retained earnings if the board votes a 2-for-1 stock split? (b) Prepare the necessary journal entries if the board votes a 100% stock dividend.

P15-1 (Equity Transactions and Statement Preparation)
On January 5, 2010, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,000 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: machinery with a fair market value of $50,000; a factory building with a fair market value of $160,000; and land with an appraised value of $270,000. July 29 Purchased 1,800 shares of common stock at $17 per share. (Use cost method.) Aug. 10 Sold the 1,800 treasury shares at $14 per share.

Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. Dec. 31 Closed the Income Summary account. There was a $175,700 net income.

Instructions
(a) Record the journal entries for the transactions listed above. (b) Prepare the stockholders’ equity section of Phelps Corporation’s balance sheet as of December 31, 2010.

E16-20 (EPS: Simple Capital Structure) On January 1, 2010, Bailey Industries had stock outstanding as follows.

6% Cumulative preferred stock, $100 par...
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