Chapter 11, Problem 1ACOMP

Case A: The charter for Rogers, Incorporated, authorized the following stock:

  Common stock, $10 par value, 103,000 shares authorized

  Preferred stock, 9 percent, $8 par value, 4,000 shares authorized

The company sold 40,000 shares of common stock and 3,000 shares of preferred stock. During the year, the following selected transactions were completed in the order given:

1. 1. Rogers declared and paid dividends in the amount of $ 10,000. How much was paid to the holders of preferred stock? How much was paid to the common stockholders?
2. 2. Rogers repurchased 5,000 shares of common stock. After this transaction, how many shares of common stock were outstanding?
3. 3. Provide the journal entry if Rogers sold 1,000 shares of treasury stock for $25 per share. The treasury stock was repurchased at $20 per share.
4. 4. Describe how the balance sheet equation (assets = liabilities + stockholders’ equity) would be affected if Rogers declared a 2-for-l stock split.