1. 2 3. 4. 5 6 7. The Marciano Corporation was expanding and on March 2,...

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1. 2 3. 4. 5 6 7. The Marciano Corporation was expanding and on March 2, 1999 it issued stock nights to its stockholders. Each right entitles GUEST to purchase one fourth (4) share of common stock at par. The market value of the stock on that date was P140 per share There was no quoted price for the rights No journal entry was made to record the foregoing 8. 9. On April 2, 1999, GUEST exercised all its stock rights. The Investment in Stock account was charged for the amount paid REQUIRED Prepare the journal entry to record the receipt of stock rights on March 2, 1999 What is the total cost of the shares acquired on April 2. 1999 ? What was the average cost per share of GUEST's Investment in Stock after the exercise of the stock rights on April 2, 1999 ? GUEST's accountant felt that the cash paid for the new shares was merely an assessment since GUEST's proportionate share in Marciano was not changed. Hence, he credited all dividends (5% in December of each year) to the Investment in Stock account until the debit was fully offset GUEST received a 50% stock dividend from Marciano in December 2003. Because the shares received were expected to be sold, the company's president instructed the accountant not to make any entry for this dividend. The company did sell the dividend shares in January 2004 for P160 per share. The proceeds from the sale were credited to income In December 2004, Marciano's stocks were split on a two-for-one basis and the new shares were issued as no par shares. GUEST found that each new share was worth P10 more than the P110 per share original acquisition cost. For this reason, GUEST decided to debit the Investment in Stock account with the additional shares received at P120 per share and credited revenue for it. In August 2005, GUEST sold one half () of its holdings in Marciano at P100 per share. The proceeds were credited to the Investment in Stock account GUEST uses the average method in recording disposals of its investment in stock. Compute the amount of cash dividends received by GUEST for the period 1999 to 2002. Prepare the journal entry to record the stock dividend received Determine the gain or loss on the sale of dividend shares received How many shares were received by GUEST as a result of the two-for-one stock split ? What journal entry should be made to record the stock split ? How much gain or loss should have been recognized by GUEST from the sale of stocks in August 2005 ? 10. How much is the unadjusted balance of the Investment in Stock account on December 31, 2005? 11. How much is the adjusted balance of the Investment in Stock account on December 31, 2005 7 1. 2 3. 4. 5 6 7. The Marciano Corporation was expanding and on March 2, 1999 it issued stock nights to its stockholders. Each right entitles GUEST to purchase one fourth (4) share of common stock at par. The market value of the stock on that date was P140 per share There was no quoted price for the rights No journal entry was made to record the foregoing 8. 9. On April 2, 1999, GUEST exercised all its stock rights. The Investment in Stock account was charged for the amount paid REQUIRED Prepare the journal entry to record the receipt of stock rights on March 2, 1999 What is the total cost of the shares acquired on April 2. 1999 ? What was the average cost per share of GUEST's Investment in Stock after the exercise of the stock rights on April 2, 1999 ? GUEST's accountant felt that the cash paid for the new shares was merely an assessment since GUEST's proportionate share in Marciano was not changed. Hence, he credited all dividends (5% in December of each year) to the Investment in Stock account until the debit was fully offset GUEST received a 50% stock dividend from Marciano in December 2003. Because the shares received were expected to be sold, the company's president instructed the accountant not to make any entry for this dividend. The company did sell the dividend shares in January 2004 for P160 per share. The proceeds from the sale were credited to income In December 2004, Marciano's stocks were split on a two-for-one basis and the new shares were issued as no par shares. GUEST found that each new share was worth P10 more than the P110 per share original acquisition cost. For this reason, GUEST decided to debit the Investment in Stock account with the additional shares received at P120 per share and credited revenue for it. In August 2005, GUEST sold one half () of its holdings in Marciano at P100 per share. The proceeds were credited to the Investment in Stock account GUEST uses the average method in recording disposals of its investment in stock. Compute the amount of cash dividends received by GUEST for the period 1999 to 2002. Prepare the journal entry to record the stock dividend received Determine the gain or loss on the sale of dividend shares received How many shares were received by GUEST as a result of the two-for-one stock split ? What journal entry should be made to record the stock split ? How much gain or loss should have been recognized by GUEST from the sale of stocks in August 2005 ? 10. How much is the unadjusted balance of the Investment in Stock account on December 31, 2005? 11. How much is the adjusted balance of the Investment in Stock account on December 31, 2005 7

Answer rating: 100% (QA)

Lets address each of the required tasks step by step Prepare the journal entry to record the receipt of stock rights on March 2 1999 No journal entry is needed for the receipt of stock rights because ... View the full answer