Reference no: EM132597209

Questions -

Q1- Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 50,000 shares of 3% preferred stock, $60 par and 350,000 shares of $25 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

Q2- Senior Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Senior Life Co.: Common stock (310,000 shares authorized; 5,000 shares issued), $100 par, $500,000; Paid-In Capital in excess of par- common stock, $100,000; and Retained earnings, $5,500,000. The board of directors declared a 1% stock dividend when the market price of the stock was $135 a share. Senior Life Co. reported no income or loss for the current year.

a- Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value.

b- Journalize the entry to record the issuance of the stock certificates.

c- Determine the following amounts before the stock dividend was declared: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.

d- Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.