Common stock : Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights. Preferred stock : Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders. Cash dividends : This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company. To determine : The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

Question

On December 31, calculated the payroll, which indicates gross earnings for wages ($460,000), payroll deductions for income tax ($48,000), payroll deductions for FICA ($40,000), payroll deductions for United Way ($6,000), employer contributions for FICA (matching), and state and federal unemployment taxes ($4,000). Employees were paid in cash, but payments for the corresponding payroll deductions have not been made and employer taxes have not yet been recorded. Collected rent revenue of $2,100 on December 10 for office space that Sandler rented to another business. The rent collected was for 30 days from December 12 to January 10 and was credited in full to Deferred Revenue. Required: 1. & 2. Prepare the entries required on December 31 to record payroll, the collection of rent on December 10 and adjusting journal entry on December 31. 3. Show how any liabilities related to these items should be reported on the company’s balance sheet at December 31

Answer 1

Question

Chapter 12, Problem 12.1APR

(1)

To determine

Common stock: Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights.

Preferred stock: Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders.

Cash dividends: This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company.

To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

(2)

To determine

The average annual dividend per share for each class of stock for the six-year period.

(3)

(a)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

(b)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

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On December 31, calculated the payroll, which indicates gross earnings for wages ($460,000), payroll deductions for income tax ($48,000), payroll deductions for FICA ($40,000), payroll deductions for United Way ($6,000), employer contributions for FICA (matching), and state and federal unemployment taxes ($4,000). Employees were paid in cash, but payments for the corresponding payroll deductions have not been made and employer taxes have not yet been recorded. Collected rent revenue of $2,100 on December 10 for office space that Sandler rented to another business. The rent collected was for 30 days from December 12 to January 10 and was credited in full to Deferred Revenue. Required: 1. & 2. Prepare the entries required on December 31 to record payroll, the collection of rent on December 10 and adjusting journal entry on December 31. 3. Show how any liabilities related to these items should be reported on the company’s balance sheet at December 31

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Answer 2

Question

Chapter 12, Problem 12.1APR

(1)

To determine

Common stock: Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights.

Preferred stock: Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders.

Cash dividends: This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company.

To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

(2)

To determine

The average annual dividend per share for each class of stock for the six-year period.

(3)

(a)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

(b)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 12.1APR

(1)

To determine

Common stock: Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights.

Preferred stock: Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders.

Cash dividends: This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company.

To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

(2)

To determine

The average annual dividend per share for each class of stock for the six-year period.

(3)

(a)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

(b)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 12.1APR

(1)

To determine

Common stock: Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights.

Preferred stock: Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders.

Cash dividends: This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company.

To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

(2)

To determine

The average annual dividend per share for each class of stock for the six-year period.

(3)

(a)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

(b)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 12.1APR

(1)

To determine

Common stock: Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights.

Preferred stock: Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders.

Cash dividends: This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company.

To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

(2)

To determine

The average annual dividend per share for each class of stock for the six-year period.

(3)

(a)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

(b)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

Answer 6

Chapter 12, Problem 12.1APR

(1)

To determine

Common stock: Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights.

Preferred stock: Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders.

Cash dividends: This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company.

To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

Answer 7

Chapter 12, Problem 12.1APR

(1)

To determine

Common stock: Common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders. This is an investment for the shareholders for which they receive the dividends from the issuing company, and have voting rights.

Preferred stock: Preferred stock is the cash raised by the company by issuing preferred shares. This investment fetches a preferential right for dividend for the preferred stockholders over the common stockholders.

Cash dividends: This is the amount of cash distributed to stockholders by a company out its earnings, according to their proportion of shares invested in the company.

To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years

Answer 8

(2)

To determine

The average annual dividend per share for each class of stock for the six-year period.

Answer 9

(2)

To determine

The average annual dividend per share for each class of stock for the six-year period.

Answer 10

(3)

(a)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

Answer 11

(3)

(a)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

Answer 12

(b)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

Answer 13

(b)

To determine

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

Answer 14

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Answer 15

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Answer 25

Ch. 12 - Of two corporations organized at approximately the...Ch. 12 - A stockbroker advises a client to buy preferred...Ch. 12 - A corporation with both preferred stock and common...Ch. 12 - An owner of 2,500 shares of Simmons Company common...Ch. 12 - Prob. 5DQ Ch. 12 - Prob. 6DQ Ch. 12 - A corporation reacquires 60,000 shares of its own...Ch. 12 - The treasury stock in Discussion Question 7 is...Ch. 12 - Prob. 9DQ Ch. 12 - Prob. 10DQ

Solution Summary: The author explains that common stock is the cash raised by the company by issuing common or ordinary shares to the stockholders.

Concept explainers

The average annual dividend per share for each class of stock for the six-year period.

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for preferred stock

The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for common stock

Chapter 12 Solutions