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4 years ago

A company has the following transactions during the year related to stockholders’ equity.

Business

1 answer:

Ivanshal [37]4 years ago

5 0

Answer:

Journal entries are given below

Explanation:

February 1

(Issues 5,000 shares of no-par common stock for $15 per share)

DEBIT CREDIT

Cash(5000 x $15) $75,000

Common stock $75,000

May 15

(Issues 500 shares of $10 par value, 7.5% preferred stock for $12 per share)

DEBIT CREDIT

Cash (500x$12) $6,000

Preferred stock (500x$10) $5,000

Additional paid in capital $1,000

October 1

Declares a cash dividend of $0.75 per share

DEBIT CREDIT

Retained Earnings (5500x$0.75) $4,125

Dividend Payable $4,125

October 15 Date of Record

No Entry Required

October 31 Pays the cash dividend

DEBIT CREDIT

Dividend Payable $4,125

Cash $4,125

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3 years ago

The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its str

Kryger [21]

Answer:

B. Report it as a discontinued operation.

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3 years ago

AirStep Shoe Company has two retail stores, one in Gainesville and the other in Orlando. The Gainesville store had sales of $100

Yakvenalex [24]

Answer:

D. $45,000

Explanation:

The computation of the contribution margin for the Orlando store is

= Total sales × contribution margin percentage - Gainesville sales × contribution margin percentage

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= $80,000 - $35,000

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3 years ago

On January 1, Year 1, Manning Company granted 97,000 stock options to certain executives. The options are exercisable no sooner

umka21 [38]

Answer:

$77,600

Explanation:

Total value of compensation expenses:

= No. of options granted × Fair of value options

= 97,000 × $4

= $388,000

Compensation expenses should be recognized per year:

= Total value of compensation expenses ÷ Excercisable time

= $388,000 ÷ 3

= $129,333.33

Expenses recognized in year 1 = $129,333.33

Due to unexpected turnover 20% of the options are forfeited,

Annual compensation = $388,000 × 80%

= $310,400

Annual compensation in year 2:

= Accumulated compensation expenses in year 2 - Expenses recognized in year 1

= [$310,400 × (2/3)] - $129,333.33

= $206,933.33 - $129,333.33

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4 years ago