Accounting Problems

"Exercise 12 -2 "Date "Account "Amount "Amount "Mar "8 "Legal expenses "30000 "Common stock "5000 " Paid in capital in excess of par - common stock "25000 " To record payment of legal services "Jun "12 "Cash "375000 "Common stock "60000 " Paid in capital in excess of par - common stock "315000 " To record issuance of 60 ,000 shares "Jul "11 "Cash "110000 " stock "100000 " Paid in capital in excess of par - stock "10000 " Tor record issuance of 1 ,000 prefered shares "Nov "28 "Treasury stock "80000 "Cash "80000 " To record taking back 2 ,000 shares "Exercise 12 -8 "Date "Account "Amount "Amount "Jan

"1 "Cash "475000 "Common stock "475000 " Tor record 95 ,000 shares investment "Apri "1 "Cash "255000 "Common stock "75000 "Premium - common stock "180000 " To rcord 15 ,000 shares investment "Jun "15 "Dividends "110000 "Dividends payable "110000 " To record 1 per share dividend declaration "Jul "10 "Dividends payable "110000 "Cash "110000 " To record cash payment of dividends "Dec "1 "Cash "38000 "Common stock "10000 " To record 2 ,000 shares investment "Dec "15 "Dividends "134400 "Dividends payable "134400 " to record 1 .20 per share dividend declaration "Balance Sheet "Debit "Credit "December 31 , YYYY "Liabilities "Accounts payable "0 "Notes payable "0 "Loans payable "0 "Dividends payable "134400 "Total liabilities "134400 "Stockholders ' Equity "Common stock "560000 "Premium - common stock "180000 "Dividends "-134400 "Net income "Total stockholders ' equity "605600 "Exercise 12 -2A "Exercise 12 -10 "Outstanding "Per "Date "Shares "Amount "share "BEFORE ACTION "39752 "60000 "600000 "10 "Alternative A : 5 stock dividend "3000 "AFTER STOCK DIVIDEND "Total "63000 "600000 "9 .952 "Alternative B : 10 Stock split "Outstanding "Per "Date "Shares "Amount "share "BEFORE ACTION "39752 "60000 "600000 "10 "Alternative A : 2 for 1 stock split "AFTER STOCK SPLIT "Total "120000 "600000 "5 "Comparison "The stock dividend reduces the per share value of the stocks to 10 "On the other hand , the stock split reduced the per share value to 5 "Alternative A has a higher per share value than alternative B "In addition , the stock dividend increases the number of shares by 3 ,000 "On the other hand , the stock spli increases the number of shares by 60 ,000 shares "One advantage of alternative B is that more people can afford to invest in the company " because the per share value is lower than Alternative B "Exercise 12 -2A "Date "Account "Amount "Amount "Mar "1 "Treasury stock "35000 "Cash "35000 " To record 5 ,000 treasury share transaction "Jun "1 "Cash "10000 "Treasury stock "7000 " Additional paid in capital - treasury stock "3000 " To record 1 ,000 treasury share sale "Sep "1 "Cash "18000 "Treasury stock "14000 " Paid in capital - treasury stock "4000 " To record 2 ,000 treasury share sale "Dec "1 "Cash "5000 "Retained earnings "2000 "Treasury stock "7000 " To record 1 ,000 treasury share sale "T R A N S A C T I O N S "CLOSING ENTRY " During the Year "Dec "31 "Net income "J12 "60000 "Retained earnings "J12 "60000 " To record closing of net income "Net "39448 "Income "39813 "Stockholders...