!Required information[The following information applies to the questions displayed below.]Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders willreceive one share of Badger stock for each 10 shares of stock they already own. Madison owns 1,000 shares of Badgerstock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of thisyear.Note: Leave no answer blank. Enter zero if applicable.c. How would you answer parts (a) and (b) if Badger offered shareholders a choice between receiving one additional share of Badgerstock for each 10 Badger shares held or receiving $120 cash in lieu of an additional share of stock?If she takes the:StockCashTaxable dividend income$11,000 $12,000Income tax basis per share of new shares$12,000 $10,000

c. If Badger Corporation offered a choice between additional stock or cash, the tax implications for…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Donahue Corporation is authorized by its charter from the state of Illinois to issue 750 shares of preferred stock with a 7% dividend rate and a par value of $50 per share and 22,000 shares of common stock with a par value of $0.01 per share. On January 1, 2019, Donahue Corporation issues 250 shares of preferred stock at $55 per share and 12,900 shares of common stock at $13 per share. Required: Prepare the journal entry to record the issuance of the stock. 2019 Jan. 1 (Record sale of preferred and common stock)
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Hammond Manufacturing Inc. was legally incorporated on January 2, 2020. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.0 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 2020 Jan. 12 Issued 40,300 common shares at $4.4 each. 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $32,000. 31 Issued 76,000 common shares in exchange for land, building, and equipment, which have fair market values of $356,000, $476,000, and $44,000, respectively. Mar. 4 Purchased equipment at a cost of $8,120 cash. This was thought to be a special bargain price. It was felt that at least $10,400 would normally have had to be paid to acquire this equipment. Dec. 31 During 2020, the company incurred a loss of $92,000. The Income Summary account was closed. 2021…
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Pearl Inc. owns shares of Martinez Corporation stock. At December 31, 2020, the securities were carried in Pearl’s accounting records at their cost of $821,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $1,333,000, Pearl declared a property dividend whereby the Martinez securities are to be distributed on October 23, 2021, to stockholders of record on October 8, 2021.Prepare all journal entries necessary on those three dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Hammond Manufacturing Inc. was legally incorporated on January 2, 2020. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.0 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 2020 Jan. 12 Issued 40,300 common shares at $4.4 each. 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $32,000. 31 Issued 76,000 common shares in exchange for land, building, and equipment, which have fair market values of $356,000, $476,000, and $44,000, respectively. Mar. 4 Purchased equipment at a cost of $8,120 cash. This was thought to be a special bargain price. It was felt that at least $10,400 would normally have had to be paid to acquire this equipment. Dec. 31 During 2020, the company incurred a loss of $92,000. The Income Summary account was closed. 2021…
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! Required information [The following information applies to the questions displayed below.] Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will receive one share of Badger stock for each 10 shares of stock they already own. Madison owns 1,000 shares of Badger stock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of this year. Note: Leave no answer blank. Enter zero if applicable. b. What is the tax basis in Madison's new and existing stock in Badger Corporation, assuming the distribution is nontaxable? Note: Round your answer to the nearest whole number. Income tax basis per share $ 91
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Use the following information to answer the next four questions. A company begins operations on 1/1/22, selling 100,000 shares of common stock (with 500,000 shares authorized). These shares have a par value of $1/share and were originally sold for $5/share. On 3/1/22, the company repurchases 1,000 common shares for $8/share (the company does not formally retire the shares). On 5/1/22, the company resells 500 of those shares for $10/share. On 8/1/22, the company declares and executes a 2-for-1 stock split. On 12/1/22, the company declares a $0.10/share cash dividend. The date of record is 12/31/22 and the payment date is 1/10/23. Net income during 2022 was $200,000 At 12/31/22, the common shares are trading at $7/share. a) What is the balance in common stock at 12/31/22? b) What is the balance in additional paid in capital at 12/31/22? c) What is the balance in treasury stock at 12/31/22? d) What is the balance in retained earnings at 12/31/22?

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