+1-415-670-9189
info@expertsmind.com
Prepare journal entries to record above stock transactions
Course:- Accounting Basics
Reference No.:- EM131722743




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

Exercise 1:

An inexperienced accountant for Moon Corporation made the following entries.

July 1     Cash.................................................................... 210,000

                      Common Stock............................................                   210,000

                        (Issued 15,000 shares of no-par common stock,

                        stated value $10 per share)

Sept. 1    Common Stock...................................................    28,000

              Retained Earnings...............................................      6,000

                      Cash.............................................................                     34,000

                        (Purchased 2,000 shares issued on July 1 for the

                        treasury at $17 per share)

Dec. 1     Cash....................................................................    18,000

                      Common Stock............................................                     14,000

                      Gain on Sale of Stock..................................                       4,000

                        (Sold 1,000 shares of the treasury stock at $18 per

                        share)

Instructions: On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions. (Omit explanations.)

Exercise 2:

The stockholders' equity section of Palmer Corporation's balance sheet at December 31, 2007, appears below:

     Stockholders' equity

          Paid-in capital

              Common stock, $10 par value, 400,000 shares authorized;

                 250,000 issued and outstanding                                     $2,500,000

          Paid-in capital in excess of par                                                1,200,000

                   Total paid-in capital                                                       3,700,000

          Retained earnings                                                                        600,000

                   Total stockholders' equity                                            $4,300,000

During 2008, the following stock transactions occurred:

Jan. 18 Issued 50,000 shares of common stock at $30 per share.

Aug. 20 Purchased 25,000 shares of Palmer Corporation's common stock at $24 per share to be held in the treasury.

Nov. 5 Reissued 9,000 shares of treasury stock for $28 per share.

Instructions

(a) Prepare the journal entries to record the above stock transactions.

(b) Prepare the stockholders' equity section of the balance sheet for Palmer Corporation at December 31, 2008. Assume that net income for the year was $100,000 and that no dividends were declared.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
From the e-Activity, identify the accounts that the fraud had affected, and analyze the auditor's responsibility to detect fraud. Suggest key internal controls that would ha
The objective of FRS 5 - Reporting the substance of transactions, is to ensure that a reporting entity's financial statements report the substance of the transactions into w
Consider Jerry Jones other 30+ businesses in other locations. Chances are they do most of their computing during working hours, while football games are usually scheduled fo
In good form, prepare the static budget operating income in contribution format. Suppose sales demand increases to 500,000 units for October. Prepare the flexible budget for O
Ferman Corporation's common stockholders' equity at the beginning and end of 2010 was $870,000 and $1,130,000, respectively. Ferman Corporation's payout ratio for 2010 was ?
A change in estimate was made in 2011 to reflect these additional data. What amount should Wolverine record as the balance of the accumulated depreciation account for this m
Kevin is a candidate for an undergraduate degree at a local university. During 2010, he was granted a fellowship that provided the following: What amount can Kevin exclude fr
Assume you are an instructor of a graduate-level leadership and ethics course.  Compare and contrast the concepts of leadership, trustworthiness, and ethical stewardship in