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intermediate accounting reporting
Intermediate Accounting 16th Edition Donald E. Kieso - Solutions
(LO3) (Allocate Transaction Price) Refer to the revenue arrangement in E18-13.Instructions Repeat requirements (a) and (b) assuming Crankshaft does not have market data with which to determine the standalone selling price of the installation services. As a result, an expected cost plus margin
(LO3) (Allocate Transaction Price) Crankshaft Company manufactures equipment. Crankshaft’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from$200,000 to $1,500,000 and are quoted inclusive of installation. The
(LO3) (Allocate Transaction Price) Shaw Company sells goods that cost $300,000 to Ricard Company for $410,000 on January 2, 2017. The sales price includes an installation fee, which has a standalone selling price of $40,000. The standalone selling price of the goods is $370,000. The installation is
(LO2,3) (Allocate Transaction Price) Refer to the revenue arrangement in E18-10. Repeat the requirements, assuming(a) Geraths estimates the standalone selling price of the installation based on an estimated cost of $400 plus a margin of 20%on cost, and (b) given uncertainty of finding skilled
(LO2,3) (Allocate Transaction Price) Geraths Windows manufactures and sells custom storm windows for threeseason porches. Geraths also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors.
(LO2,3) (Determine Transaction Price) Taylor Marina has 300 available slips that rent for $800 per season. Payments must be made in full by the start of the boating season, April 1, 2018. The boating season ends October 31, and the marina has a December 31 year-end. Slips for future seasons may be
(LO2,3) (Determine Transaction Price) Aaron’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $100 on January 2, 2017. In addition, Aaron will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy.
(LO2) (Determine Transaction Price) Blair Biotech enters into a licensing agreement with Pang Pharmaceutical for a drug under development. Blair will receive a payment of $10,000,000 if the drug receives regulatory approval. Based on prior experience in the drug-approval process, Blair determines
(LO2) (Determine Transaction Price) Bill Amends, owner of Real Estate Inc., buys and sells commercial properties.Recently, he sold land for $3,000,000 to the Blackhawk Group, a developer that plans to build a new shopping mall. In addition to the $3,000,000 sales price, Blackhawk Group agrees to
(LO2) (Determine Transaction Price) Jeff Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Club. Concrete Always enters into a contract with Dakota to construct the path for $200,000. In addition, as part of the contract, a performance bonus of $40,000 will
(LO2) (Determine Transaction Price) Jupiter Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2017. The goods have a sales price of $610,000 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,000. Past
(LO1,2) (Existence of a Contract) On May 1, 2017, Richardson Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $900 in advance on May 15, 2017. Kickapoo pays Richardson on May 15, 2017, and
(LO1) (Fundamentals of Revenue Recognition) Respond to the questions related to the following statements.1. A wholly unperformed contract is one in which the company has neither transferred the promised goods or services to the customer nor received, or become entitled to receive, any
(LO1) (Fundamentals of Revenue Recognition) Presented below are five different situations. Provide an answer to each of these questions.1. The Kawaski Jeep dealership sells both new and used Jeeps. Some of the Jeeps are used for demonstration purposes; after 6 months, these Jeeps are then sold as
*E17-28 (L06) (Cash Flow Hedge) Hart Golf Co. uses titanium in the production of its specialty drivers. Hart anticipates that it will need to purchase 200 ounces of titanium in November 2017, for clubs that will be sold in advance of the spring and summer of 2018. However, if the price of titanium
*E17-27 (L05) (Call Option) On August 15, 2016, Outkast Co. invested idle cash by purchasing a call option on Counting Crows Inc. common shares for $360. The notional value of the call option is 400 shares, and the option price is $40. The option expires on January 31, 2017. The following data are
*E17-26 (L06) (Fair Value Hedge) Sarazan Company issues a 4-year, 7.5% fixed-rate interest only, nonprepayable $1,000,000 note payable on December 31, 2016. It decides to change the interest rate from a fixed rate to variable rate and enters into a swap agreement with M&S Corp. The swap agreement
*E17-25 (L06) (Cash Flow Hedge) On January 2, 2017, Parton Company issues a 5-year, $10,000,000 note at LIBOR, with interest paid annually. The variable rate is reset at the end of each year. The LIBOR rate for the first year is 5.8%.Parton Company decides it prefers fixed-rate financing and wants
*E17-24 (L06) (Fair Value Hedge) On January 2, 2017, MacCloud Co. issued a 4-year, $100,000 note at 6% fixed interest, interest payable semiannually. MacCloud now wants to change the note to a variable-rate note.As a result, on January 2, 2017, MacCloud Co. enters into an interest rate swap where
*E17-23 (L05) (Derivative Transaction) On January 2, 2017, Jones Company purchases a call option for $300 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share. The market price of a Merchant share is $50 on January 2,
(L04) (Impairment) Elaina Company has the following investments as of December 31, 2017:Investments in common stock of Laser Company $1,500,000 Investment in debt securities of FourSquare Company $3,300,000 In both investments, the carrying value and the fair value of these two investments are the
(L01,2,4) (Fair Value Option) Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2017. This is Dawson Company’s first year of operations.Carrying Fair Value Amount (at December 31)Investment in debt securities (intent is to hold to
(L02,4) (Fair Value Measurement Issues) Assume the same information as in E17-19 for Lilly Company. In addition, assume that the investment in the Woods Inc. stock was sold during 2018 for $195,000. At December 31, 2018, the following information relates to its two remaining investments of common
(L02,4) (Fair Value Measurement) Presented below is information related to the purchases of common stock by Lilly Company during 2017.Cost Fair Value(at purchase date) (at December 31)Investment in Arroyo Company stock $100,000 $ 80,000 Investment in Lee Corporation stock 250,000 300,000 Investment
(L04) (Impairment of Debt Securities) Hagar Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $800,000, an amortized cost of $800,000, and a fair value of $720,000. The company believes that impairment accounting is now
(L03) (Equity Method) On January 1, 2017, Pennington Corporation purchased 30% of the common shares of Edwards Company for $180,000. During the year, Edwards earned net income of $80,000 and paid dividends of $20,000.Instructions Prepare the entries for Pennington to record the purchase and any
(L02,3) (Fair Value and Equity Method Compared) Jaycie Phelps Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2017. The purchase price was $1,200,000 for 50,000 shares. Kulikowski Inc.declared and paid an $0.85 per share cash dividend on June 30 and on
(L02) (Equity Investments) Kenseth Company has the following securities in its portfolio on December 31, 2017.None of these investments are accounted for under the equity method.Investments Cost Fair Value 1,500 shares of Gordon, Inc., common $ 73,500 $ 69,000 5,000 shares of Wallace Corp., common
(L02) (Equity Investment) Oregon Co. had purchased 200 shares of Washington Co. for $40 each this year (Oregon Co. does not have significant influence). Oregon Co. sold 100 shares of Washington Co. stock for $45 each. At year-end, the price per share of the Washington Co. stock had dropped to
(L03) (Equity Method) Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income in dividends each year.Instructions Use the information in the following T-account for the investment in Sub to answer the following questions.Investment in Sub
(L02,3) (Journal Entries for Fair Value and Equity Methods) The following are two independent situations.Situation 1: Conchita Cosmetics acquired 10% of the 200,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2017. On June 30, Martinez declared and paid
(L02) (Equity Securities Entries) Aranda Corporation made the following cash purchases of securities during 2017, which is the first year in which Arantxa invested in securities.1. On January 15, purchased 10,000 shares of Sanchez Company’s common stock at $33.50 per share plus commission
(L04) (Comprehensive Income Disclosure) Assume the same information as E17-9 and that Steffi Graf, Inc. reports net income in 2017 of $120,000 and in 2018 of $140,000. Total holding gains (including any realized holding gain or loss) equal$40,000 in 2018.Instructions(a) Prepare a statement of
(L01) (Available-for-Sale Debt Securities Entries and Financial Statement Presentation) At December 31, 2017, the available-for-sale debt portfolio for Steffi Graf, Inc. is as follows.On January 20, 2018, Steffi Graf, Inc. sold security A for $15,100. The sale proceeds are net of brokerage
(L02) (Equity Securities Entries and Reporting) Satchel Corporation purchases equity securities costing $73,000. At December 31, the fair value of the portfolio is $65,000.Instructions Prepare the adjusting entry to report the securities properly, assuming that the investments purchased represent
(L02) (Equity Securities Entries) On December 21, 2017, Bucky Katt Company provided you with the following information regarding its equity investments.During 2018, Colorado Co. stock was sold for $9,400. The fair value of the stock on December 31, 2018, was Clemson Corp.stock—$19,100; Buffaloes
(L02) (Entries for Equity Securities) The following information is available for Barkley Company at December 31, 2017, regarding its investments.Instructions (a) Prepare the adjusting entry (if any) for 2017, assuming no balance in the Fair Value Adjustment account at January 1, 2017. Neither of
(L01) EXCEL (Effective-Interest versus Straight-Line Bond Amortization) On January 1, 2017, Phantom Company acquires $200,000 of Spiderman Products, Inc., 9% bonds at a price of $185,589. Interest is received on January 1 of each year, and the bonds mature on January 1, 2020. The investment will
(L01) (Entries for Available-for-Sale Securities) Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows.2017 $320,500 2020 $310,000 2018 $309,000 2021 $300,000 2019 $308,000
(L01) (Entries for Held-to-Maturity Securities) On January 1, 2017, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000 for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on
(L01) EXCEL (Entries for Held-to-Maturity Securities) On January 1, 2017, Dagwood Company purchased at par 6%bonds having a maturity value of $300,000. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. The bonds are classified in the
(L01,2) (Investment Classifications) For the following investments, identify whether they are:1. Trading debt securities.2. Available-for-sale debt securities.3. Held-to-maturity debt securities.4. None of the above.Each case is independent of the other.(a) A bond that will mature in 4 years was
(L06) (Stock-Appreciation Rights) Capulet Company establishes a stock-appreciation rights program that entitles its new president Ben Davis to receive cash for the difference between the market price of the stock and a pre-established price of $30 (also market price) on December 31, 2013, on 30,000
(L06) (Stock-Appreciation Rights) On December 31, 2013, Beckford Company issues 150,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $10. The fair value of the SARs is estimated to be
(L05) (EPS with Warrants) Howat Corporation earned $360,000 during a period when it had an average of 100,000 shares of common stock outstanding. The common stock sold at an average market price of $15 per share during the period.Also outstanding were 15,000 warrants that could be exercised to
(L05) (EPS with Contingent Issuance Agreement) Winsor Inc. recently purchased Holiday Corp., a large midwestern home painting corporation. One of the terms of the merger was that if Holiday’s income for 2017 was $110,000 or more, 10,000 additional shares would be issued to Holiday’s
(L05) (EPS with Options, Various Situations) Venzuela Company’s net income for 2017 is $50,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2016, each exercisable for one share at $6. None has been exercised, and 10,000 shares of common were outstanding
(L05) (EPS with Convertible Bonds and Preferred Stock) On January 1, 2017, Crocker Company issued 10-year,$2,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Crocker common stock. Crocker’s net income in 2017 was $300,000, and its tax rate was 40%. The
(L05) (EPS with Convertible Bonds and Preferred Stock) The Simon Corporation issued 10-year, $5,000,000 par, 7%callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 14:1, and in 2 years
(L05) (EPS with Convertible Bonds) On June 1, 2015, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis.On April 1, 2017, the company issued an additional 400,000 shares of
(L05) (EPS with Convertible Bonds, Various Situations) In 2016, Chirac Enterprises issued, at par, 60 $1,000, 8%bonds, each convertible into 100 shares of common stock. Chirac had revenues of $17,500 and expenses other than interest and taxes of $8,400 for 2017. (Assume that the tax rate is 40%.)
(L04) (EPS: Simple Capital Structure) At January 1, 2017, Langley Company’s outstanding shares included the following.280,000 shares of $50 par value, 7% cumulative preferred stock 900,000 shares of $1 par value common stock Net income for 2017 was $2,530,000. No cash dividends were declared or
(L04) (EPS: Simple Capital Structure) On January 1, 2017, Lennon Industries had stock outstanding as follows.6% Cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares $1,000,000 Common stock, $10 par value, issued and outstanding 200,000 shares 2,000,000 To acquire the net
(L04) (EPS: Simple Capital Structure) A portion of the combined statement of income and retained earnings of Seminole Inc. for the current year follows.At the end of the current year, Seminole Inc. has outstanding 8,500,000 shares of $10 par common stock and 50,000 shares of 6% preferred. On April
(L04) (EPS: Simple Capital Structure) Flagstad Inc. presented the following data.Net income $2,500,000 Preferred stock: 50,000 shares outstanding,$100 par, 8% cumulative, not convertible 5,000,000 Common stock: Shares outstanding 1/1 750,000 Issued for cash, 5/1 300,000 Acquired treasury stock for
(L04) (EPS: Simple Capital Structure) Ace Company had 200,000 shares of common stock outstanding on December 31, 2018. During the year 2019, the company issued 8,000 shares on May 1 and retired 14,000 shares on October 31. For the year 2019, Ace Company reported net income of $249,690 after a loss
(L04) (EPS: Simple Capital Structure) On January 1, 2018, Wilke Corp. had 480,000 shares of common stock outstanding.During 2018, it had the following transactions that affected the common stock account.February 1 Issued 120,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 100,000
(L04) EXCEL (Weighted-Average Number of Shares) Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $10 par common stock. At no time has Newton issued any potentially dilutive securities. Listed below is a summary of Newton’s common
(L03) (Accounting for Restricted Stock) Tweedie Company issues 10,000 shares of restricted stock to its CFO, Mary Tokar, on January 1, 2017. The stock has a fair value of $500,000 on this date. The service period related to this restricted stock is 5 years. Vesting occurs if Tokar stays with the
(L03) (Accounting for Restricted Stock) Derrick Company issues 4,000 shares of restricted stock to its CFO, Dane Yaping, on January 1, 2017. The stock has a fair value of $120,000 on this date. The service period related to this restricted stock is 4 years. Vesting occurs if Yaping stays with the
(L03) (Issuance, Exercise, and Termination of Stock Options) On January 1, 2016, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Nichols’ $5 par value common stock at a price of $20 per share. The options were exercisable
(L03) (Issuance, Exercise, and Termination of Stock Options) On January 1, 2018, Titania Inc. granted stock options to officers and key employees for the purchase of 20,000 shares of the company’s $10 par common stock at $25 per share. The options were exercisable within a 5-year period beginning
(L03) (Issuance and Exercise of Stock Options) On November 1, 2017, Columbo Company adopted a stock-option plan that granted options to key executives to purchase 30,000 shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years
(L02) (Issuance of Bonds with Stock Warrants) On May 1, 2017, Friendly Company issued 2,000 $1,000 bonds at 102.Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 98, but the fair value of the warrants cannot be determined.Instructions(a)
(L02) (Issuance of Bonds with Detachable Warrants) On September 1, 2017, Sands Company sold at 104 (plus accrued interest) 4,000 of its 9%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of
(L02) (Issuance of Bonds with Warrants) Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at
(L01) (Conversion of Bonds) On January 1, 2017, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into eight shares of Gottlieb Corporation $100 par value common
(L01) (Conversion of Bonds) The December 31, 2017, balance sheet of Kepler Corp. is as follows.10% callable, convertible bonds payable (semiannual interest dates April 30 and October 31; convertible into 6 shares of $25 par value common stock per $1,000 of bond principal; maturity date April 30,
(L01) (Conversion of Bonds) On January 1, 2016, when its $30 par value common stock was selling for $80 per share, Plato Corp. issued $10,000,000 of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each$1,000 bond to convert the bond into five shares of the
(L01) (Conversion of Bonds) Vargo Company has bonds payable outstanding in the amount of $500,000, and the Premium on Bonds Payable account has a balance of $7,500. Each $1,000 bond is convertible into 20 shares of preferred stock of par value of $50 per share. All bonds are converted into
(L01) (Conversion of Bonds) Aubrey Inc. issued $4,000,000 of 10%, 10-year convertible bonds on June 1, 2017, at 98 plus accrued interest. The bonds were dated April 1, 2017, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis.On April 1,
(L01,2) EXCEL (Issuance and Conversion of Bonds) For each of the unrelated transactions described below, present the entry(ies) required to record each transaction.1. Grand Corp. issued $20,000,000 par value 10% convertible bonds at 99. If the bonds had not been convertible, the company’s
(LO5) (Computation of Book Value per Share) Morgan Sondgeroth Inc. began operations in January 2015 and reported the following results for each of its 3 years of operations.2015 $260,000 net loss 2016 $40,000 net loss 2017 $800,000 net income At December 31, 2017, Morgan Sondgeroth Inc. capital
*E 15-23 (LO5) (Preferred Stock Dividends) Cajun Company has outstanding 2,500 shares of $100 par, 6% preferred stock and 15,000 shares of $10 par value common. The following schedule shows the amount of dividends paid out over the last 4 years.Instructions Allocate the dividends to each type of
*E 15-22 (LO5) (Preferred Dividends) Matt Schmidt Company’s ledger shows the following balances on December 31, 2017.7% Preferred stock—$10 par value, outstanding 20,000 shares $ 200,000 Common stock—$100 par value, outstanding 30,000 shares 3,000,000 Retained earnings 630,000 Instructions
*E 15-21 (LO5) (Preferred Dividends) The outstanding capital stock of Edna Millay Corporation consists of 2,000 shares of $100 par value, 8% preferred, and 5,000 shares of $50 par value common.Instructions Assuming that the company has retained earnings of $90,000, all of which is to be paid out in
(LO4) (Trading on the Equity Analysis) Presented below is information from the annual report of Emporia Plastics, Inc.Instructions (a) Compute the return on common stockholders’ equity and the rate of interest paid on bonds. (Assume balances for debt and equity accounts approximate averages for
(L04) (Comparison of Alternative Forms of Financing) Shown below is the liabilities and stockholders’ equity section of the balance sheet for Jana Kingston Company and Mary Ann Benson Company. Each has assets totaling $4,200,000.For the year, each company has earned the same income before
(L01,2,3,4) GROUPWORK (Dividends and Stockholders’ Equity Section) Anne Cleves Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet.Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000 Common stock,
(L04) (Stockholders’ Equity Section) Bruno Corporation’s post-closing trial balance at December 31, 2017, is shown as follows.At December 31, 2017, Bruno had the following number of common and preferred shares.Common Preferred Authorized 600,000 60,000 Issued 200,000 10,000 Outstanding 190,000
(L04) (Computation of Retained Earnings) The following information has been taken from the ledger accounts of Isaac Stern Corporation.Total income since incorporation $317,000 Total cash dividends paid 60,000 Total value of stock dividends distributed 30,000 Gains on treasury stock transactions
(L03) EXCEL (Dividend Entries) The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2016.Current assets $540,000 Debt investments (trading) 624,000 Common stock (par value $10) 500,000 Paid-in capital in excess of par 150,000 Retained earnings
(L03) (Entries for Stock Dividends and Stock Splits) The stockholders’ equity accounts of G.K. Chesterton Company have the following balances on December 31, 2017.Common stock, $10 par, 300,000 shares issued and outstanding $3,000,000 Paid-in capital in excess of par—common stock 1,200,000
(L03) (Stock Split and Stock Dividend) The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares
(L03) (Cash Dividend and Liquidating Dividend) Lotoya Davis Corporation has 10 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 80 cents per share cash dividend to stockholders of record as of June 14, payable June 30.Instructions (a) Prepare the
(L03,4) (Equity Items on the Balance Sheet) The following are selected transactions that may affect stockholders’equity.1. Recorded accrued interest earned on a note receivable.2. Declared a cash dividend.3. Declared and distributed a stock split.4. Approved a retained earnings restriction.5.
(L02,4) (Analysis of Equity Data and Equity Section Preparation) For a recent 2-year period, the balance sheet of Santana Dotson Company showed the following stockholders’ equity data at December 31 (in millions).Instructions (a) Answer the following questions.(1) What is the par value of the
(L01,3) (Preferred Stock Entries and Dividends) Otis Thorpe Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2017.Instructions Answer the questions in each of the following independent situations.(a) If
(L01,2) (Correcting Entries for Equity Transactions) Pistons Inc. recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During
(L02) (Effect of Treasury Stock Transactions on Financials) Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Joe Dumars then entered into the following transactions.1. Purchased 5,000 treasury shares at $45 per share.2. Resold 2,000 of
(L01,2) (Stock Issuances and Repurchase) Lindsey Hunter Corporation is authorized to issue 50,000 shares of $5 par value common stock. During 2017, Lindsey Hunter took part in the following selected transactions.1. Issued 5,000 shares of stock at $45 per share, less costs related to the issuance of
(L01) (Lump-Sum Sales of Stock with Preferred Stock) Dave Matthew Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $100,000.Instructions(a) Prepare the journal entry for the issuance when the market price of the common shares is
(L01) (Lump-Sum Sale of Stock with Bonds) Faith Evans Corporation is a regional company which is an SEC registrant.The corporation’s securities are thinly traded on NASDAQ. Faith Evans Corp. has issued 10,000 units. Each unit consists of a $500 par, 12% subordinated debenture and 10 shares of $5
(L01,2) (Stock Issued for Land) Twenty-five thousand shares reacquired by Elixir Corporation for $53 per share were exchanged for undeveloped land that has an appraised value of $1,700,000. At the time of the exchange, the common stock was trading at $62 per share on an organized
(L01) (Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following
(L01) EXCEL (Recording the Issuances of Common Stock) During its first year of operations, Collin Raye Corporation had the following transactions pertaining to its common stock.Jan. 10 Issued 80,000 shares for cash at $6 per share.Mar. 1 Issued 5,000 shares to attorneys in payment of a bill for
(L06) (Debtor/Creditor Entries for Modification of Troubled Debt) Vargo Corp. owes $270,000 to First Trust. The debt is a 10-year, 12% note due December 31, 2017. Because Vargo Corp. is in financial trouble, First Trust agrees to extend the maturity date to December 31, 2019, reduce the principal
(L06) (Debtor/Creditor Entries for Settlement of Troubled Debt) Gottlieb Co. owes $199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is in financial trouble, Ceballos Inc. agrees to accept some land and cancel the entire debt. The property has a book value of $90,000
(L06) (Term Modification with Gain—Creditor’s Entries) Using the same information as in E14-22 and E14-24, answer the following questions related to American Bank (creditor).Instructions(a) Compute the loss American Bank will suffer under this new term modification. Prepare the journal entry to
(L06) (Term Modification with Gain—Debtor’s Entries) Use the same information as in E14-22 above except that American Bank reduced the principal to $1,900,000 rather than $2,400,000. On January 1, 2021, Barkley pays $1,900,000 in cash to American Bank for the principal.Instructions(a) Can
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