Last Corporation had the following stockholders' equity amounts on January 1, 2021: Preferred Stock, 4%, $20 par, 30,000 shares authorized, 7,000 shares issued and 7,000 shares outstanding, cumulative (one year of dividends in arrears), nonparticipating $140,000 Paid in Capital in Excess of Par – Preferred Common Stock, $10 par, 5,000,000 shares authorized, 14,000 600,000 shares issued and 590,000 shares outstanding 6,000,000 Paid in Capital in Excess of Par – Common Total Paid in Capital Retained Earnings Total Paid in Capital plus Retained Earnings Treasury Stock 18,000,000 24,154,000 2,000,000 26,154,000 - 390,000 $25,764,000 Total Stockholders’ Equity Last completed the following chronological transactions during 2021: Declared a cash dividend to satisfy the preferred stockholders when the preferred stock was selling for $22 per share а. b. Declared a 3% stock dividend for the common stockholders when the common stock was selling for $48 per share. Paid the cash dividend in “a." when the preferred was selling for $21.75 per share. Paid the stock dividend in “b." when the common was selling for $47 per share. с. d. е. Called in 1,000 shares of preferred stock at the call price of $23. f. Sold 3,000 shares of the treasury stock for $49 per share in cash. Discovered a mistake in calculating depreciation back in 2019. The amount of depreciation was too high by $50,000. The tax rate in 2019 was 28% and the tax rate for g. 2021 was 30%. INSTRUCTIONS: Prepare journal entries for the above events Prepare the updated stockholders' equity section of the balance sheet in good form on December 31, 2021, including the effects of the entries above assuming that net income 1. 2. for 2021 was $600,000.
Last Corporation had the following stockholders' equity amounts on January 1, 2021: Preferred Stock, 4%, $20 par, 30,000 shares authorized, 7,000 shares issued and 7,000 shares outstanding, cumulative (one year of dividends in arrears), nonparticipating $140,000 Paid in Capital in Excess of Par – Preferred Common Stock, $10 par, 5,000,000 shares authorized, 14,000 600,000 shares issued and 590,000 shares outstanding 6,000,000 Paid in Capital in Excess of Par – Common Total Paid in Capital Retained Earnings Total Paid in Capital plus Retained Earnings Treasury Stock 18,000,000 24,154,000 2,000,000 26,154,000 - 390,000 $25,764,000 Total Stockholders’ Equity Last completed the following chronological transactions during 2021: Declared a cash dividend to satisfy the preferred stockholders when the preferred stock was selling for $22 per share а. b. Declared a 3% stock dividend for the common stockholders when the common stock was selling for $48 per share. Paid the cash dividend in “a." when the preferred was selling for $21.75 per share. Paid the stock dividend in “b." when the common was selling for $47 per share. с. d. е. Called in 1,000 shares of preferred stock at the call price of $23. f. Sold 3,000 shares of the treasury stock for $49 per share in cash. Discovered a mistake in calculating depreciation back in 2019. The amount of depreciation was too high by $50,000. The tax rate in 2019 was 28% and the tax rate for g. 2021 was 30%. INSTRUCTIONS: Prepare journal entries for the above events Prepare the updated stockholders' equity section of the balance sheet in good form on December 31, 2021, including the effects of the entries above assuming that net income 1. 2. for 2021 was $600,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:HANDOUT PROBLEM on VARIOUS OTHER STOCK TRANSACTIONS
Last Corporation had the following stockholders' equity amounts on January 1, 2021:
Preferred Stock, 4%, $20 par, 30,000 shares authorized,
7,000 shares issued and 7,000 shares outstanding, cumulative
(one year of dividends in arrears), nonparticipating
$140,000
Paid in Capital in Excess of Par – Preferred
Common Stock, $10 par, 5,000,000 shares authorized,
14,000
600,000 shares issued and 590,000 shares outstanding
6,000,000
18,000,000
Paid in Capital in Excess of Par – Common
Total Paid in Capital
Retained Earnings
Total Paid in Capital plus Retained Earnings
Treasury Stock
24,154,000
2,000,000
26,154,000
- 390,000
$25,764,000
Total Stockholders' Equity
Last completed the following chronological transactions during 2021:
Declared a cash dividend to satisfy the preferred stockholders when the preferred stock
was selling for $22 per share
а.
b.
Declared a 3% stock dividend for the common stockholders when the common stock was
selling for $48 per share.
Paid the cash dividend in "a." when the preferred was selling for $21.75 per share.
Paid the stock dividend in "b." when the common was selling for $47 per share.
с.
d.
Called in 1,000 shares of preferred stock at the call price of $23.
Sold 3,000 shares of the treasury stock for $49 per share in cash.
Discovered a mistake in calculating depreciation back in 2019. The amount of
е.
f.
g.
depreciation was too high by $50,000. The tax rate in 2019 was 28% and the tax rate for
2021 was 30%.
INSTRUCTIONS:
Prepare journal entries for the above events
Prepare the updated stockholders' equity section of the balance sheet in good form on
December 31, 2021, including the effec
for 2021 was $600,000.
1.
2.
of the entries above assuming that net income
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