Chapter 13: Q3SE (page 708)
Journalizing issuance of stock—no-par
Wolcott Corporation issued 5,000 shares of no-par common stock for $2 per share on January 13. Record the stock issuance
Cash will be debited, andCommon stock- No par value will be credited with $10,000.
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Question: Identifying sources of equity, stock issuance, and dividends
Tillman Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2018:
Preferred Stock—5%, ? Par Value; 625,000 shares
authorized, 325,000 shares issued and outstanding
Paid-In Capital:
\( 1,300,000
1,350,000
Stockholders’ Equity
Paid-In Capital in Excess of Par—Common 2,600,000
Total Paid-In Capital 5,250,000
Retained Earnings 11,800,000
Total Stockholders’ Equity \) 17,050,000
Common Stock—$1 Par Value; 7,000,000 shares
authorized, 1,350,000 shares issued and outstanding
Requirements
3. Make two summary journal entries to record issuance of all the Tillman Comfort Specialists stock for cash. Explanations are not required.
What is the effect on the accounting equation when cash dividends are declared?
What is the effect on the accounting equation when cash dividends are paid?
Sjostrom, Inc. had beginning retained earnings of \(300,000 on January 1, 2018. During the year, Sjostrom declared and paid \)140,000 of cash dividends and earned $200,000 of net income. Prepare a statement of retained earnings for Sjostrom, Inc. for the year ended December 31, 2018.
Question: Identifying sources of equity, stock issuance, and dividends
Tillman Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2018:
Preferred Stock—5%, ? Par Value; 625,000 shares
authorized, 325,000 shares issued and outstanding
Paid-In Capital:
\( 1,300,000
1,350,000
Stockholders’ Equity
Paid-In Capital in Excess of Par—Common 2,600,000
Total Paid-In Capital 5,250,000
Retained Earnings 11,800,000
Total Stockholders’ Equity \) 17,050,000
Common Stock—$1 Par Value; 7,000,000 shares
authorized, 1,350,000 shares issued and outstanding
Requirements
2. What is the par value per share of Tillman Comfort Specialists’ preferred stock?
London Corporation has two classes of stock: Common, \(1 par value; and Preferred, \)4 par value. Journalize the issuance of 10,000 shares of common stock for $8 per share.
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