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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 8-24 (Algo) Common and preferred stock-issuances and dividends LO 1, 2 [The following information applies to the questions displayed below.) Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: • 2,000,000 shares of no-par common stock were authorized; 284,000 shares were issued on January 1, 2019, at $34 • 355,000 shares of $110 par value, 11.00% cumulative, preferred stock were authorized; 129,000 shares were issued on per share. January 1, 2019, at $137 per share. • No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp. declared dividends of $6,330,000, payable on February 12, 2022, to holders of record as of January 8, 2022. Problem 8-24 (Algo) Part a - Horizontal Model Required: 1. Use the horizontal model for the issuance of common stock and preferred stock on January 1, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Liabilities Stockholders' Equity Net Income Assets Rev Income Statement Revenues Expenses %3D %3D 2. Use the horizontal model for the declaration of dividends on December 22, 2021. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Assets Liabilities Stockholders' Equity Net Income 3. Use the horizontal model for the payment of dividends on February 12, 2022. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Inc Assets Liabilities Stockholders' Equity Net Income Revenues
Transcribed Image Text:Problem 8-24 (Algo) Common and preferred stock-issuances and dividends LO 1, 2 [The following information applies to the questions displayed below.) Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: • 2,000,000 shares of no-par common stock were authorized; 284,000 shares were issued on January 1, 2019, at $34 • 355,000 shares of $110 par value, 11.00% cumulative, preferred stock were authorized; 129,000 shares were issued on per share. January 1, 2019, at $137 per share. • No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp. declared dividends of $6,330,000, payable on February 12, 2022, to holders of record as of January 8, 2022. Problem 8-24 (Algo) Part a - Horizontal Model Required: 1. Use the horizontal model for the issuance of common stock and preferred stock on January 1, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Liabilities Stockholders' Equity Net Income Assets Rev Income Statement Revenues Expenses %3D %3D 2. Use the horizontal model for the declaration of dividends on December 22, 2021. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Assets Liabilities Stockholders' Equity Net Income 3. Use the horizontal model for the payment of dividends on February 12, 2022. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Inc Assets Liabilities Stockholders' Equity Net Income Revenues
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