Sheffield Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Sheffield Corp. has issued 18,500 units. Each unit consists of a $1,140 par value, 12% subordinated debenture and 19 shares of $9 par common stock. The units were sold to outside investors for cash at $1,628 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Sheffield's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 1. Employing the incremental method. 2. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. No. Account Titles and Explanation 1. 2. Debit Credit

Sheffield Corporation is a regional company which is an SEC registrant. The corporation's securities are thinly traded on NASDAQ. Sheffield Corp. has issued 18,500 units. Each unit consists of a $1,140 par value, 12% subordinated debenture and 19 shares of $9 par common stock. The units were sold to outside investors for cash at $1,628 per unit. Prior to this sale, the 2-week ask price of common stock was $40 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. (a) Prepare the journal entry to record Sheffield's transaction, under the following conditions. (List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to O decimal places, e.g. 38,487. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 1. Employing the incremental method. 2. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. No. Account Titles and Explanation 1. 2. Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Meman
Mimi Corporation started business in 2007 by issuing 200,000 shares of P20 par common stock for P36 each. In 2012, 30,000 of these shares were purchased for P52 per share by Mimi Corporation and held as treasury stock. On June 15, 2013, these 30,000 shares were exchanged for a piece of property that had an assessed value of P810,000. Mimi's stock is actively traded and had a market price of P60 on June 15, 2013. The cost method is used to account for treasury stock. The amount of paid-in capital from treasury stock transactions resulting from the above events would be:
Corporation is a regional company which is an SEC registrant. The Corp. has issued 20,000 units. Each unit consists of a $1,560 par value, 12% subordinated debenture and 20 shares of $10 par common stock. The units were sold to outside investors for cash at $1,848 per unit. Prior to this sale, the 2-week ask price of common stock was $52 per share. Twelve percent is a reasonable market yield for the debentures, and therefore the par value of the bonds is equal to the fair value. corporation's securities are thinly traded on NASDAQ. (a) Prepare the journal entry to record Corp.'s transaction, under the following conditions. List all debit entries before credit entries. Do not round intermediate calculations. Round final answers to 0 decimal places. 1. Employing the incremental method. 2. Employing the proportional method, assuming the recent price quote on the common stock reflects fair value. No. Account Titles and Explanation Debit Credit 2.
Eagle Security Co. has just gone public. Under a firm commitment agreement, the firm received $36.50 for each of the 7.25 million shares sold. The initial offering price was $38.75 per share, and the stock rose to $42.65 per share in the first few minutes of trading. The firm paid $2,285,000 in direct legal and other costs and $988,000 in indirect costs. What was the underwriters' spread of this offer?
ANSWER?
Rahul
A Brazilian company called Netshoes completed its IPO on April 12, 2017, and listed on the NYSE. Netshoes sold 8,250,000 shares of stock to primary market investors at an IPO offer price of $18, with an underwriting dis-count of 6.5%. Secondary market investors, however, were paying only $16.10 per share for Netshoes’ 31,025,936 shares of stock outstanding.a. Calculate the total proceeds for Netshoes’ IPO.b. Calculate the dollar amount of the underwriting fee for Netshoes’ IPO.c. Calculate the net proceeds for Netshoes’ IPO.d. Calculate market capitalization for Netshoes’ outstanding stock.e. Calculate IPO underpricing for Netshoes’ IPO.f. Explain the IPO underpricing for Netshoes.
Filer Manufacturing has 5,766,872 shares of common stock outstanding. The current share price is $36.05, and the book value per share is $7.08. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $64,298,817, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $48,100,600, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par. The most recent dividend was $2.78 and the dividend growth rate is 0.05. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.35. What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)
Cullumber, Inc., a high-technology firm in Portland, raised a total of $60 million in an IPO. The company received $27 of the $30 per share offering price. The firm’s legal fees, SEC registration fees, and other out-of-pocket costs were $350,000. The firm’s stock price increased 17 percent on the first day of trading. What was the total cost to the firm of issuing the securities?
1
Huntington Power Co. has issued following three securities as its long-term source of capital. Calculate the weights of each source of capital (kd, kp, ke). Debt: 2,500 bonds outstanding, current market price of the bond is $1,080. Preferred Stock: 3,000 shares outstanding, selling for $98. Common Stock: 60,000 shares outstanding, selling for $55 per share. a. 42.90%; 4.67%; 52.43% b. 45.63%; 1.72%; 59.67% c. 42.90%; 4.67%; 55.71% d. 59.67%; 5.08%; 35.24% e. 45.63%; 1.72%; 52.65% f. 42.90%; 2.23%; 52.14%
In 2007, Xero Ltd. offered a subscription of 15 million shares at an offer price of $1.00 per share with the ability to accept oversubscriptions of up to $3 million. The prospectus detailed the requirement that all applications must be accompanied by payment in full for the total number of shares applied for and stated that application monies will be banked upon receipt into a designated bank account and held on trust pending the allocation of shares. Required: Assuming all 18 million shares were applied for, prepare the journal entry to record the receipt of application monies. Apart from recording a cash inflow, explain whether Xero should also record another asset, a liability, revenue or an expense upon collection of application monies, and explain why.