Omit all general journal entryexplanations.
Ensure to include correct dollar signs, underlines &double underlines.
Question 1:
On December 31, 2014, Frick Incorporated, had the followingbalances (all balances are normal):
Accounts
Amount
Preferred Stock, ($100 par value, 5% noncumulative,50,000 shares authorized, 10,000 shares issued andoutstanding)
$1,000,000
Common Stock ($10 par value, 200,000 shares authorized,100,000 shares issued and outstanding)
$1,000,000
Paid-in Capital in Excess of par, Common
150,000
Retained Earnings
700,000
The following events occurred during 2014 and were notrecorded:
a. On January 1, Frick declared a 5% stock dividend on its commonstock when the market value of the common stock was $15 per share.Stock dividends were distributed on January 31 to shareholders asof January 25.
b. On February 15, Frick reacquired 1,000 shares of common stockfor $20 each.
c. On March 31, Frick reissued 250 shares of treasury stock for $25each.
d. On July 1, Frick reissued 500 shares of treasury stock for $16each.
e. On October 1, Frick declared full year dividends for preferredstock and $1.50 cash dividends for outstanding shares and paidshareholders on October 15.
f. One December 15, Frick split common stock 2 shares for 1.
g. Net Income for 2014 was $275,000.
Requirements:
a. Prepare journal entries for the transactionslisted above.
b. Prepare a Stockholders' section of aclassified balance sheet as of December 31, 2014.
Omit all general journal entryexplanations.
Ensure to include correct dollar signs, underlines &double underlines.
Question 1:
On December 31, 2014, Frick Incorporated, had the followingbalances (all balances are normal):
Accounts | Amount |
Preferred Stock, ($100 par value, 5% noncumulative,50,000 shares authorized, 10,000 shares issued andoutstanding) | $1,000,000 |
Common Stock ($10 par value, 200,000 shares authorized,100,000 shares issued and outstanding) | $1,000,000 |
Paid-in Capital in Excess of par, Common | 150,000 |
Retained Earnings | 700,000 |
The following events occurred during 2014 and were notrecorded:
a. On January 1, Frick declared a 5% stock dividend on its commonstock when the market value of the common stock was $15 per share.Stock dividends were distributed on January 31 to shareholders asof January 25.
b. On February 15, Frick reacquired 1,000 shares of common stockfor $20 each.
c. On March 31, Frick reissued 250 shares of treasury stock for $25each.
d. On July 1, Frick reissued 500 shares of treasury stock for $16each.
e. On October 1, Frick declared full year dividends for preferredstock and $1.50 cash dividends for outstanding shares and paidshareholders on October 15.
f. One December 15, Frick split common stock 2 shares for 1.
g. Net Income for 2014 was $275,000.
Requirements:
a. Prepare journal entries for the transactionslisted above.
b. Prepare a Stockholders' section of aclassified balance sheet as of December 31, 2014.
Related questions
Oakwood Inc. is a public enterprise whose shares are traded inthe over-the-counter market. At December 31, 2015, Oakwood had6,000,000 authorized shares of $10 par value common stock, of which2,000,000 shares were issued and outstanding. The shareholders'equity accounts at December 31, 2015, had the followingbalances:
| Common stock | $20,000,000 | |
| Additional paid-in capital on common stock | 7,500,000 | |
| Retained earnings | 6,470,000 |
Transactions during 2016 and other information relating to theshareholders' equity accounts were as follows:
On January 5, 2016, Oakwood issued at $54 per share, 100,000shares of $50 par value, 9%, cumulative convertible preferredstock. Each share of preferred stock is convertible, at the optionof the holder, into 2 shares of common stock. Oakwood had 600,000authorized shares of preferred stock.
On February 2, 2016, Oakwood reacquired 20,000 shares of itscommon stock for $16 per share. Oakwood uses the cost method toaccount for treasury stock.
On April 27, 2016, Oakwood sold 500,000 shares (previouslyunissued) of $10 par value common stock to the public at $17 pershare.
On June 18, 2016, Oakwood declared a cash dividend of $1 pershare of common stock, payable on July 13, 2016, to shareholders ofrecord on July 2, 2016.
On November 9, 2016, Oakwood sold 10,000 shares of treasurystock for $21 per share.
On December 14, 2016, Oakwood declared the yearly cash dividendon preferred stock, payable on January 14, 2017, to shareholders ofrecord on December 31, 2016.
On January 18, 2017, before the books were closed for 2016,Oakwood became aware that the ending inventories at December 31,2015, were understated by $300,000 (the after-tax effect on 2015net income was $210,000). The appropriate correcting entry wasrecorded the same day.
After correcting the beginning inventory, net income for 2016was $4,500,000.
Required:
1. Prepare a statement of retained earnings for Oakwood for theyear ended December 31, 2016. Assume that only single-periodfinancial statements for 2016 are presented.
2. Prepare the shareholders' equity section of Oakwood's balancesheet at December 31, 2016.
