The Nick Company was formed during 2067. It has 700,000 shares of no-par common stock, as well as 400,000 shares of $1 par, preferred stock, authorized. During 2018. the following transactions occurred related to the Nick Company:

a. Issued 50.000 shares of preferred stock for $200.000 cash.

b. Issued 100,000 shares of common stock for $900,000 cash.

c. Nick reacquired 1.000 shares of common stock for $8 per share, and accounts for reacquired shares using the treasury stock method.

d. Nick sold SOO of the treasury shares for $7 per share, and retired the remaining.

e. Nick declared a $1 per share cash dividend for both the common and the preferred shares.

f. Nick pays the cash dividend declared in (e) above.

g. Since all of the common shares are owned by three individuals in equal amounts. Nick declares a property dividend to these common shareholders. Specifically. Nick has three land holdings of equal size that have a cost of $50,000 each, but am worth presently $130,000 each. Nick will distribute these three land holdings to these three shareholders.

h. Nick formally distributes these land holdings to the three shareholders identified in (g) above.

i. The Nick Company acquired a large tract of land by issuing 20.000 shares of common stock and 100,000 shares of preferred stock. The common stock was selling for $10 per share, while the preferred stock was valued at $5 per share. Nick had three appraisers appraise the land and the values ranged from a low of $640,000 to a high of $732,000.

Required:

Fully account for the above transactions for the Nick Company during 20.8.

Answer rating: 100% (QA)

Journal entries for above situations a Cash acDr 200000 To preferred stock ac 200000 Being 50000 pre... View the full answer