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Activation Exercise 13-1: Issuing Stock (Understanding the Business Transaction)

On January 6, Dee-Light Corporation issued for cash 16,650 shares of $1 par value common stock at $34 per share. On May 10, Dee-Light issued at par 4,550 shares of preferred 3% stock, $20 par for cash. On June 22, Dee-Light issued for cash 23,250 shares of 3%, $25 par value preferred stock at $33 per share. Determine the amount of cash that Dee-Light will receive from each of these stock issuances.

Issue Date Cash Received
January 6 $ _
May 10 $_
June 22 $ _

Recording in the Accounting System

a. Journalize the entry to record the January 6 issuance of common stock. If an amount box does not require an entry, leave it blank or enter "0".

b. Journalize the entry to record the May 10 issuance of preferred stock.

c. Journalize the entry to record the June 22 issuance of preferred stock. If an amount box does not require an entry, leave it blank or enter "0".

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Nestor Rutherford
Nestor RutherfordLv2
28 Sep 2019

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Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication at the beginning of the current year:

Preferred 2% Stock, $80 par (100,000 shares authorized, 60,000 shares issued) $4,800,000
Paid-In Capital in Excess of Par—Preferred Stock 210,000
Common Stock, $9 par (3,000,000 shares authorized, 1,750,000 shares issued) 15,750,000
Paid-In Capital in Excess of Par—Common Stock 1,400,000
Retained Earnings 52,840,000

During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:

a. Purchased 87,500 shares of treasury common for $8 per share.

b. Sold 55,000 shares of treasury common for $11 per share.

c. Issued 20,000 shares of preferred 2% stock at $84.

d. Issued 400,000 shares of common stock at $13, receiving cash.

e. Sold 18,000 shares of treasury common for $7.50 per share.

f. Declared cash dividends of $1.60 per share on preferred stock and $0.05 per share on common stock.

g. Paid the cash dividends.

Required:

Journalize the entries to record the transactions.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Complete each question record transactions


Question 1

Hernandez Company had the following stock transactions duringthe year:

  1. Issued 25,000 shares of $1 par common stock for $25,000.

  2. Issued 20,000 shares of $1 par common stock for $22,000cash.

  3. Issued 22,000 shares of $1 par common stock for $21,000cash.

  4. Issued 2,000 shares of $50 par, 8% preferred stock for $100,000cash.

  5. Issued 1,000 shares of $50 par, 8% preferred stock for $49,000cash.

  6. Issued 1,000 shares of $50 par 8% preferred stock for$51,500

  7. Issued 2,500 shares of no-par common stock for $11,875 cash

  8. Issued 1,500 shares of no par 7% preferred stock for $72,000cash.


Question 2

Kris Kraft Stores had the following stock transactions duringthe year.

  1. Issued 4,000 shares of no par common stock with a stated valueof $10 per share for $40,000 cash.

  2. Issued 6,000 shares of no par common stock with a stated valueof $8 per share for $50,000 cash.

  3. Issued 5,000 shares of no par 6% preferred stock with a statedvalue of $15 per share for $75,000 cash.

  4. Issued 3,000 shares of no par 6% preferred stock with a statedvalue of $20 per share for $58,000 cash.

  5. Issued 10,000 shares of $8 par common stock with a $9 fairmarket value for a building with an uncertain fair marketvalue.

  6. Issued 10,000 shares of $5 common stock for land with a fairmarket value of $50,000.

  7. Issued 8,000 shares of $50 par, 8% preferred stock for land witha fair market value of $405,000.


Question 3

During the year ended December 21, 2013, Smith Company completedthe following transactions:

  1. 04/15 Declared a semiannual dividend of $0.80 per share onpreferred stock and $0.05 per share on common stock to shareholdersof record on 05/05, payable on 05/10. Currently, 4,000shares of $100 par preferred stock and 50,000 shares of $1 parcommon stock are outstanding.

  2. 05/05 Record date of record entry.

  3. 05/10 Paid cash dividends.

  4. 10/15 Declared semiannual dividend of $0.80 per share onpreferred stock and $0.50 per share on common stock to shareholdersof record on November 5, payable on November 20.

  5. 11/5 Record date of record entry.

  6. 11/20 Paid cash dividends

  7. 11/22 Declared a 10% stock dividend to shareholders of record onDecember 8, distributable on December 16. Market valueof the common stock was estimated to be $8.

  8. 12/08 Record date of record entry.

  9. 12/16 issued certificated for common stock dividend.

  10. 12/20 Board of directors declared a two for one common stocksplit.





Journalize the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

Jan. 15. Split the common stock 5 for 1 and reduced the par from $75 to $15 per share. After the split, there were 475,000 common shares outstanding.

Feb. 28. Purchased 38,000 shares of the corporation's own common stock at $20, recording the stock at cost.

May 1. Declared semiannual dividends of $3.10 on 30,000 shares of preferred stock and $0.3 on the common stock to stockholders of record on June 1, payable on July 10.

July 10. Paid the cash dividends.

Sept. 7. Sold 27,000 shares of treasury stock at $28, receiving cash.

Oct. 1. Declared semiannual dividends of $3.10 on the preferred stock and $0.36 on the common stock (before the stock dividend).

Oct. 1. A 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $30.

Dec. 1. Paid the cash dividends.

Dec. 1. Issued the certificates for the common stock dividend.

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