When companies offer new equity security issues, they publicize the offerings in the financial press and on Inter-net sites. Assume the following were among the equity offerings reported in December 2016:New Securities IssuesEquityAmerican Materials Transfer Corporation (AMTC)-7.5 million common shares, $.001 par, priced at$13.546 each through underwriters led by Second Tennessee Bank N.A. and Morgan, Dunavant & Co.,according to a syndicate official.Proactive Solutions Inc. (PSI)-Offering of nine million common shares, $.01 par, was priced at$15.20 a share via lead manager Stanley Brothers, Inc., according to a syndicate official.Required:Prepare the appropriate journal entries to record the sale of both issues to underwriters. Ignore share issue costs.

Common stock: These are the ordinary shares that a corporation issues to the investors in order to…

Answered: When companies offer new equity…

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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Stock investment transactions, equity method and available-for-sale securitiesSoto Industries, Inc. is an athletic footware company that began operations on January 1, 2021. The following are bond (held-to-maturity) transactions by Soto Industries, Inc., which has a fiscal year ending on December 31:2021Apr. 1 Purchased $100,000 of Welch Co. 6% 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1.June 1 Purchased $210,000 of Bailey 4% 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on May 1 and November 1.Sept. 1 Received semiannual interest on the Welch Co. bonds.Sept. 30 Sold $40,000 of Welch Co. bonds at 97 plus accrued interest of $200.Nov. 1 Received semiannual interest on the Bailey bonds.Dec. 31 Accrued interest on the Welch Co. bonds.Dec. 31 Accrued interest on the Bailey bonds.2022Mar. 1 Received semiannual interest on the Welch Co. bonds.May 1…
It is January 1, 2017. Glocabe Networks is contemplating the acquisition of competitor Jupiter Networks by issuing stock to purchase target shares (stock purchase). The following details are available: January 1, 2017 Current share price Offer price Diluted shares outstanding (mm) 4.5 2017 GAAP earnings per share (EPS) forecast $3.12 $0.19 $0.96 Glocabe and Jupiter's diluted shares outstanding have not changed since January 1, 2016. You may assume the companies have the same tax rate. What is the 2017 accretion/dilution in Glocabe's GAAP EPS assuming the acquisition took place on January 1, 2017? - $0.43 O -$1.54 Glocabe Jupiter $30.00 $50.00 $60.00 -$0.24 2.2 $4.51
Q2. The following transactions involving marketable securities investments of Kappa Co., occurred during 2022; a) On Feb. 14, purchased Alfa's 90-day bonds, paying cash of $170,000 (par value $170,000), issue date Feb. 14, that pay 9% interest. b) On March 21, purchased 850 shares of Beta Co. at $21 per share, in cash. c) On May 14, collected the principal and 90-days' interest on the bonds purchased in transaction a. d) On Aug. 1, paid $70,000 cash to Gama Co.'s 12% bonds (par value $70,000), issue date July 31, 2022, and retires January 31, 2023. e) On Sept. 1, Beta Co. declared a $1.80 per share cash dividend on shares payable on Oct.31. f) On Oct. 7, sold 425 shares of Beta Co. and collected totally $10,625. g) On Oct. 31, collected Gama Co.'s 90-days' interest and Beta Co.'s dividends. Required: Prepare the journal entries and post to necessary ledger accounts.
On December 31, 2014, Hubble Corp. has the following securities in its portfolio of temporary investments: Cost Market 5,000 common shares of Orion Corp. $ 82,500 $ 90,500 10,000 common shares of Rigel Ltd. 90,000 84,500 $172,500 $175,000 On May 1, 2015, Hubble purchased 500 common shares of Aries Corp. @ $50.25 each plus 6.0% brokerage fee. On July 1, 2015 Hubble received dividends totalling $4,250 from their portfolio investments. On December 31, 2015, Hubble’s portfolio of trading equity securities reported the following market values: 5,000 common shares of Orion Corp. $ 71,600 10,000 common shares of Rigel Ltd. 98,500 500 common shares of Aries Corp. 27,750…
On January 1, 2017, Slug Corporation issued $6.4 million of 6%, 10-year convertible bonds at 103. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of $1 par common stock. Fuzz Company purchased 30% of the issue as an investment. On July 1, 2021, Fuzz converted all of its bonds into common stock of Slug. The market price per share for Slug was $36 at the time of the conversion. Both companies use the straight-line method for amortization. Required: 1. Prepare journal entries for the issuance of the bonds on the issuer and the investor books. 2. Prepare the journal entries for the conversion on the books of the issuer and the investor. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries for the issuance of the bonds on the issuer and the investor books. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your…
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Insta Corp. invests in shares of other companies in 2015 for generating profit as shown below; Market Value Dec. 31 Security Purchase date 2016 Date sold Selling price Cost 2015 DT June 2015 48.000TL 54.000TL T 60.800TL Feb. 2017 59.600TL EA June 2015 116.000TL 104.800TL March 114.000TL 2016 a. Classify each investment as trading or available for sale. DT: EA: b. Prepare the necessary journal entries for Insta Corp. (Hint: entries for purchase of securities, adjusting entries at Dec.31 2015 and 2016, entries for sale of securities).
Compute for the following with solution: 1. Number of presefrence share subscribed 2. Number of Ordinary share subscribed
The following data on the Bond Record Company are available: Earnings available for common stockholders $700,000 Number of shares of common stock outstanding 350,000 Earnings per share ($700,000÷350,000) $2 Market price per share $36 Price/earnings (P/E) ratio ($36÷$2) 18 The firm is currently considering whether it should use $350,000 (not included in the $$700,000 earnings listed in the financial data) of its earnings to help pay cash dividends of $1.00 per share or to repurchase stock at $36 per share. a. Approximately how many shares of stock can the firm repurchase at the $36-per-share price, using the funds that would have gone to pay the cash dividend? b. Calculate the EPS after the repurchase. c. In a perfect market, what is the stock price after the repurchase and what is the P/E ratio? d. Compare the pre- and post-repurchase earnings per share.

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