Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 13, Problem 13.21EX
To determine
To list: The identified errors in the stockholders’ equity section of the balance sheet.
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List the errors in the following Stockholders' Equity section of the balance sheet prepared
as of the end of the current year:
Stockholders' Equity
Paid-in capital:
Preferred 2% stock, $80 par (125,000 shares
authorized and issued)....
Excess of issue price over par.
Retained earnings....
Treasury stock (75,000 shares at cost)
Dividends payable...
Total paid-in capital
$10,000,000
$ 10,500,000
96,700,000
500,000
1,755,000
430,000
$ 109,385,000
Common stock, $20 par (1,000,000 shares authorized,
825,000 shares issued).....
17,655,000
Organizing costs ....
Total stockholders'equity..
300,000
$127,340,000
... ...
The year-end balance sheet of Social Systems, Inc. includes the following stockholders’ equity section (with certain details omitted):
Stockholders’ equity:
8% cumulative preferred stock, $100 par value,
callable at $104, 100,000 shares authorized................................................. $3,200,000
Common stock, $3 par value, 1,000,000 shares
authorized................................................................................................. 1,200,000
Additional paid-in capital: Common stock........................................................ 2,800,000
Donated capital............................................................................................... 610,000
Retained earnings............................................................................................ 3,470,000
Total stockholders’…
On October 10, the stockholders’ equity section of Sherman Systems appears as follows. Common stock—$10 par value, 72,000 shares authorized, issued, and outstanding . . . . . . $ 720,000 Paid-in capital in excess of par value, common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 864,000 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,800,000 1. Prepare journal entries to record the following transactions for Sherman Systems. a. Purchased 5,000 shares of its own common stock at $25 per share on October 11. b. Sold 1,000 treasury shares on November 1 for $31 cash per share. c. Sold all remaining treasury shares on November 25 for $20 cash per share. 2. Prepare the stockholders’ equity section after the October 11 treasury stock…
Chapter 13 Solutions
Accounting
Ch. 13 - Of two corporations organized at approximately the...Ch. 13 - Prob. 2DQCh. 13 - A corporation with both preferred stock and common...Ch. 13 - An owner of 2,500 shares of Simmons Company common...Ch. 13 - Prob. 5DQCh. 13 - What is the primary purpose of a stock split?Ch. 13 - Prob. 7DQCh. 13 - The treasury stock in Discussion Question 7 is...Ch. 13 - What are the three classifications of restrictions...Ch. 13 - Indicate how prior period adjustments should he...
Ch. 13 - A Dividends per share Reinhardt Furniture Company...Ch. 13 - Dividends per share Zero Calories Company has...Ch. 13 - Entries for issuing stock On May 23, Stoltz Realty...Ch. 13 - Entries for issuing stock On January 22, Zentric...Ch. 13 - Prob. 13.3APECh. 13 - Entries for cash dividends The declaration,...Ch. 13 - Prob. 13.4APECh. 13 - Entries for stock dividends Antique Buggy...Ch. 13 - Prob. 13.5APECh. 13 - Entries for treasury stock On May 27, Hydro...Ch. 13 - Reporting stockholders' equity Using the following...Ch. 13 - Reporting stockholders' equity Using the following...Ch. 13 - Retained earnings statement Rockwell Inc. reported...Ch. 13 - Retained earnings statement None Cruises Inc....Ch. 13 - Earnings per share Financial statement data for...Ch. 13 - Earnings per share Financial statement data for...Ch. 13 - Dividends per share Imaging Inc., a developer of...Ch. 13 - Dividends per share Lightfoot Inc., a software...Ch. 13 - Prob. 13.3EXCh. 13 - Prob. 13.4EXCh. 13 - Issuing stock for assets other than cash On April...Ch. 13 - Prob. 13.6EXCh. 13 - Issuing stock Willow Creek Nursery, with an...Ch. 13 - Issuing stock Work Place Products Inc., a...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Prob. 13.10EXCh. 13 - Prob. 13.11EXCh. 13 - Prob. 13.12EXCh. 13 - Prob. 13.13EXCh. 13 - Prob. 13.14EXCh. 13 - Treasury stock transactions Lawn Spray Inc....Ch. 13 - Prob. 13.16EXCh. 13 - Reporting paid-in capital The following accounts...Ch. 13 - Stockholders' Equity section of balance sheet The...Ch. 13 - Prob. 13.19EXCh. 13 - Retained earnings statement Sumter Pumps...Ch. 13 - Prob. 13.21EXCh. 13 - Statement of stockholders' equity The...Ch. 13 - EPS Junkyard Am, Inc., had earnings of 516,000 for...Ch. 13 - Prob. 13.24EXCh. 13 - EPS Caterpillar Inc. and Deere Company are two...Ch. 13 - Prob. 13.1APRCh. 13 - Prob. 13.2APRCh. 13 - Selected stock transactions The following selected...Ch. 13 - Entries for selected corporate transactions Morrow...Ch. 13 - Entries for selected corporate transactions...Ch. 13 - Prob. 13.1BPRCh. 13 - Stock transaction for corporate expansion Pulsar...Ch. 13 - Selected stock transactions Diamondback Welding ...Ch. 13 - Entries for selected corporate transactions Nav-Go...Ch. 13 - Entries for selected corporate transactions West...Ch. 13 - Prob. 13.1CPCh. 13 - Prob. 13.2CPCh. 13 - Communication Motion Designs Inc. has paid...Ch. 13 - Prob. 13.5CPCh. 13 - Prob. 13.6CP
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- A portion of the stockholders’ equity section from the balance cheet of WC appears as below. Stockholders’ equity: Preferred stock, 8% cumulative,$50 par, 40,000 shares authorized , issued and outstanding…………………………………………………………………. $2,000,000 Preferred stock, 12% noncumulative, $100 par, 8,000 shares authorized, Issued, and outstanding…………………………………… 800,000 Common stock, $5 par, 400,000 shares authorized, issued And outstanding……………………………………………… 2,000,000 Total paid -in capital……………………………………………….. $4,800,000 Assume that all stock issued on January 1, and that no dividends were paid during the first two years of operation. During the third year, WC paid total cash dividends of $736,000. Compute the amount of cash dividends paid per share during the third year for each of the three classes of stock. Compute the dividends paid per share during the third year for each of the three classes of stock. What was the…arrow_forwardThe year end balance sheet of CP, In., include the following stockholders’ equity section (with certain details omitted). Stockholders’ equity: Capital stock: 7% cumulative preferred stock, $100 par value……………. $15,000,000 Common stock, $5 par value, 5,000,000 shares Authorized, 4,000,000 shares issued and outstanding…… 20,000,000 Additional paid in capital: Common stock……………………………………………………………… 44,000,000 Retained earnings………………………………………………………… 64,450,000 Total stockholders’ equity…………………………………………… $143,450,000 From this information, I must compute the answers to the following question. What is the among of legal capital and the amount of total paid-in capital? What is the book value per share of common stock, assuming no dividends in arrears? Is tit possible to determine the fair market value per share of common stock from the stockholders’ equity section? Please could you explainarrow_forwardThe year end balance sheet of CP, In., include the following stockholders’ equity section (with certain details omitted). Stockholders’ equity: Capital stock: 7% cumulative preferred stock, $100 par value……………. $15,000,000 Common stock, $5 par value, 5,000,000 shares Authorized, 4,000,000 shares issued and outstanding…… 20,000,000 Additional paid in capital: Common stock……………………………………………………………… 44,000,000 Retained earnings………………………………………………………… 64,450,000 Total stockholders’ equity…………………………………………… $143,450,000 From this information, I must compute the answers to the following question. 1. What is the amount of legal capital and the amount of total paid-in capital? 2. What is the book value per share of common stock, assuming no dividends in arrears? 3. Is it possible to determine the fair market value per share of common stock from the stock-holders' equity section? Explainarrow_forward
- The year end balance sheet of CP, In., include the following stockholders’ equity section (with certain details omitted). Stockholders’ equity: Capital stock: 7% cumulative preferred stock, $100 par value……………. $15,000,000 Common stock, $5 par value, 5,000,000 shares Authorized, 4,000,000 shares issued and outstanding…… 20,000,000 Additional paid in capital: Common stock……………………………………………………………… 44,000,000 Retained earnings………………………………………………………… 64,450,000 Total stockholders’ equity…………………………………………… $143,450,000 From this information, I must compute the answers to the following question. How many shares of preferred have been issued? What is the total amount of the annual dividends to which preferred stockholders are entitled? What was the average issuance price per share common stock?arrow_forwardThe year-end balance sheet of Smithfield Products includes the following stockholders’ equity sec-tion (with certain details omitted): 7.5% cumulative preferred stock, $100 par value, 100,000 shares authorized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,400,000Common stock, $2 par value, 900,000 shares authorized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,000Additional paid-in capital: common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,325,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,595,000 Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,220,000 Instructions From this information, compute answers to the following questions: a. How many shares of preferred stock have been issued?b. What is the total amount of the annual dividends paid to…arrow_forwardShown below is the stockholders’ equity section of Powell’s balance sheet at December 31, 2009: Stockholders’ equity: Common stock, $2 par value, 500,000 shares authorized, ?? shares issued……………………………………………………$500,000 Additional paid-in capital common stock…………………………$1,750,000 Total paid in capital…………………………………………………$2,250,000 Retained earnings………………………………………………….2,400,000 Total stockholders’ equity………………………………………….$4650,000 In 2010, the following events occurred: Powell issued 2,500 shares of $2 par common stock as payment for legal services. Although Powell’s stock is not traded on any exchange, the agreed-upon value of the legal services is $80,000. Powell issued 4,500 shares of 6% cumulative preferred stock, $100 par value, for $106 per share. The board of directors declared a dividend of $1.25 per share on the common stock. Powell’s net income for 2007 was $675,000. Instructions Complete in good form the stockholders’ equity section of a balance sheet prepared for Powell at…arrow_forward
- The equity sections for Layfette Group at the beginning of the year (January1) and end of they year ( December 31) follow Stockholders Equity Jan.1 Common stock - 10$ par value 130,000 shares authorized, 50,000 shares issued and outstanding.........................................................................................................500,000$ Paid-in-Capital inexcessof par value,commonstock...............................75,000$ Retained Earnings................................................................................................410,000 Total Stockholder Equity...................................................................................985,000 Stock Holder equity Dec.31 Common Stock -10$ par value 130,000 shares authorized 54,650 shares issued and outstanding.......................................................................................546,500 Paid-in-capital in excess of par value, commonstock.............................130,000 Retained earnings…arrow_forwardThe stockholder's equity section of the balance sheet contains. .common stock .preferred stock .Additional stock .other accumulated comprehensive income. .Retained earnings It is important to understand how changes in the accounts impact the balance sheet and the financial position of the organization Genaing inc.has $200,000 of 5%, $10 par value preferred stock and $450,000 of $5 par value common stock issued and outstanding Dec. 31,2021 There were no stock issuance, stock splits or stoxk dividends for 2021. The organization's calender end is on Dec.31 2021. Preferred stock did not receive any dividends for 2019 or 2020 because the company did not have enough cash reserves to pay out dividends. The preferred stock has a mix characteristics .10% of the preferred stock is noncumulative, nonparticipating .20% of the preferred stock is cumulative, nonparticipating .20% of the preferred stock is noncumulative ,participating .50 of the preferred stock is cumulative, participating The…arrow_forwardThe year-end balance sheet of Manor, Inc., includes the following stockholders’ equity section(with certain details omitted):Stockholders’ equity:10% cumulative preferred stock, $100 par value,authorized 100,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,400,000Common stock, $2 par value, authorized2,000,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,000Additional paid-in capital: common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,800,000Donated capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,160,000Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,160,000 InstructionsFrom this information, compute answers to the…arrow_forward
- Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018. Common stock—$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding . . . . . . . . . . $400,000 Paid-in capital in excess of par value, common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270,000 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $730,000 During 2019, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 4,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of…arrow_forwardThe following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:Preferred 2% Stock, $100 par (100,000 shares authorized, 80,000 shares issued) . . . . . . $ 8,000,000Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,000Common Stock, $5 par (5,000,000 shares authorized, 4,000,000 shares issued) . . . . . . . 20,000,000Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,280,000Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,400,000During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:a. Issued 200,000 shares of common stock at $12, receiving cash.b. Issued 8,000 shares of preferred 2% stock at $115.c. Purchased…arrow_forwardBalthus Corp. reports the following components of stockholders’ equity at December 31, 2018. Common stock—$1 par value, 320,000 shares authorized, 200,000 shares issued and outstanding . . . . . . . . . . . . $ 200,000 Paid-in capital in excess of par value, common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,160,000 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,760,000 It completed the following transactions related to stockholders’ equity during 2019. Jan. 10 Purchased 40,000 shares of its own stock at $12 cash per share. Mar. 2 Directors declared a $1.50 per share cash dividend payable on March 31 to the…arrow_forward
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