Kelly Building Pty Ltd is registered builder. Its managing director, John, controls the company business activities. Johns
Question:
Kelly Building Pty Ltd is registered builder. Its managing director, John, controls the company business activities. John’s wife, Marsha, is the other director but she does not concern herself with the day-to-day management of Kelly Building Pty Ltd’s business. She is aware, however, that Kelly Building Pty Ltd has severe financial problems. In June, John, on Kelly Building Pty Ltd’s behalf, purchased $150,000 worth of building supplies on 30 credit term from Collins Manufacturing Ltd. Despite numerous demands $150,000 has not been paid. In October, Collins Manufacturing Ltd successfully applied to wind up Kelly Building Pty Ltd. Explain whether the liquidator of Kelly Building Pty Ltd can make John and Marsha personally liable for their company’s unpaid debts. Can John and Marsha rely on any of the S588H defences?
In late 2017, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2018, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $15 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2018. (Assume net income for the first quarter 2018 was $1,800,000.) Part B During 2018, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2018, the corporation reacquires 260,000 shares for the treasury at a price of $17 per share. b. On July 31, 2018, 30,000 treasury shares are reissued at $20 per share. c. On September 30, 2018, 30,000 treasury shares are reissued at $15 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Part C On October 1, 2018, Nicklaus Corporation receives permission to replace its $1 par value common stock (6,000,000 shares authorized, 4,000,000 shares issued, and 3,800,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2018, the Nicklaus Corporation declares a $0.19 per share cash dividend on common stock and a $0.36 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2018, to shareholders of record on November 15, 2018. On December 2, 2018, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2018, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $15 per share. The dividend will result in 76,000 (0.01 x 7,600,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2018, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,800,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2018. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Shareholders' equity Common stock Preferred stock Paid-in capital-excess of par Required 1 Part B. NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section September 30, 2018 Paid-in capital-share repurchase Less: Treasury stock Total shareholders' equity Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Required 2 Part B $4,000,000 O 10,000,000 ✓ 56,000,000 30,000,000 75,000 ✔ $ 100,075,000 ✔ 5,500,000 X $94,575,000 Required 1 Part C In late 2017, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2018, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $15 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2018. (Assume net income for the first quarter 2018 was $1,800,000.) Part B During 2018, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2018, the corporation reacquires 260,000 shares for the treasury at a price of $17 per share. b. On July 31, 2018, 30,000 treasury shares are reissued at $20 per share. c. On September 30, 2018, 30,000 treasury shares are reissued at $15 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Part C On October 1, 2018, Nicklaus Corporation receives permission to replace its $1 par value common stock (6,000,000 shares authorized, 4,000,000 shares issued, and 3,800,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2018, the Nicklaus Corporation declares a $0.19 per share cash dividend on common stock and a $0.36 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2018, to shareholders of record on November 15, 2018. On December 2, 2018, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2018, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $15 per share. The dividend will result in 76,000 (0.01 x 7,600,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2018, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,800,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2018. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Shareholders' equity Common stock Preferred stock Paid-in capital-excess of par Required 1 Part B. NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section September 30, 2018 Paid-in capital-share repurchase Less: Treasury stock Total shareholders' equity Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Required 2 Part B $4,000,000 O 10,000,000 ✓ 56,000,000 30,000,000 75,000 ✔ $ 100,075,000 ✔ 5,500,000 X $94,575,000 Required 1 Part C
Expert Answer:
The liquidating of the firm is the condition where a firm is un... View the full answer
Students also viewed these general management questions
-
Valeri is opening a hair salon but she does not know what business form it should take. What can you tell her about the advantages and disadvantages of operating as a sole proprietorship versus a...
-
Val is opening a hair salon, but she does not know what business form it should take. Tell her about the advantages and disadvantages of operating as a sole proprietorship versus a corporation.
-
Were Gaus and West personally liable for payments due under Smith & Wests lease?
-
You recently joined an accounting consulting firm. Your first client is a new manufacturing start-up that is trying to set up their costing system, and develop good processes for their upcoming...
-
Identify at least five guidelines that should be followed when preparing a questionnaire.
-
A corporation is an artificial being. (True/False)
-
If the interest rate at B is 20 percent, then which of the following best describes the analysis of the investment? a. The IRR of the investment is less than 20 percent. b. The IRR of the investment...
-
Sandy Shores Time Shares is one of the largest time-sharing and rental brokers for vacation cottages along the North Carolina coast. After 10 successful years of matching up owners and renters, Sandy...
-
Discuss the following: a) b) c) The usefulness of models in managerial decision-making within firms. (5 marks) Process of theory formulation/model building (using an example of a theory/model known...
-
The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca...
-
1. At what flow angle will the flow become just sonic downstream of the nozzles of a high pressure turbine? The nozzles discharge into an annulus which has a shroud diameter of 250 mm and hub to the...
-
refer to Figure 3 below. Note that this example is not explained in the text, but applies the same principles.
-
Solve the given system of linear equations applying equivalent elementary row operations. Do not use matrices when solving it. 1. Show all steps to modify the system to REF 2. Show REF of your system...
-
Write a program reading integers until zero is entered and printing the length of the longest sequence of consecutive numbers of the same value (and this value). For example, for 2 2 2 2 3 3 3 2 6 6...
-
+4.44 x 10-6 C + 91 Find the net force on 92. +7.28 x 10-6 C X + 92 0.100 m 0.100 m- +2.25 x 10-6 C +93 F = force exerted on q2 by 91 F3 = force exerted on 92 by 93 F = 29.1 N F=[?]N F3 = -14.7 N...
-
A 25.0 kg mass moving at a velocity of + 3.0 m/s is stopped by a constant force of 15.0 N. How many seconds must the force act on the mass to stop it? (5 points)
-
In early 20X1, Mr. Carpet purchased $200,000 of common shares in a company listed on thelocal stock exchange, with an annual eligible dividend of $5,000. The current fair market value of the shares...
-
Consider the function f and its graph. a. Estimate the zeros of the area function b. Estimate the points (if any) at which A has a local maximum or minimum. c. Sketch a graph of A, for 0 x 10,...
-
On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances: During January 2024, the following transactions occurred: January 1 Borrowed $100,000 from Captive...
-
Information from the financial statements of Park-Rao Industries included the following at December 31, 2024: Park-Raos net income for the year ended December 31, 2024, is $520 million. The income...
-
On January 1, 2024, National Insulation Corporation (NIC) leased equipment from United Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there...
-
The following are summaries of the cash book and bank accounts of J. Duncan who does not keep his books using the double entry system. You are required to: (a) Calculate the value of J. Duncan's...
-
Read the following and answer the questions below. On 31 December 2015 the bank column of C. Tench's cash book showed a debit balance of 1,500. The monthly bank statement written up to 31 December...
-
The bank columns in the cash book for June 2016 and the bank statement for that month for D. Hogan are as follows: You are required to: () Write the cash book up to date to take the above into...
Study smarter with the SolutionInn App