Acc 291 Week 4 Individual Assignment Exercises

ACC 291 WEEK 4 INDIVIDUAL ASSIGNMENT EXERCISES

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ACC 291 WEEK 4 INDIVIDUAL ASSIGNMENT – EXERCISES,
E11-15
Before Action After Stock Dividend After Stock Split
Stockholders’ equity
Paid-in capital
Common stock $600,000 $630,000 $600,000
In excess of par value 0 3,000 x ($14-$10)=12,000 0
Stockholders’ equity
Paid-in capital
Capital stock
8% Preferred stock, $100 par value
Noncumulative, 40,000 authorized shares
2,400 issued and outstanding shares…………………………………………………………………….$240,000
Common Stock, no par, $5.00
400,000 authorized shares, 399,000 outstanding……………………………………………..……2,000,000
Additional paid-in capital in excess of par value-preferred stock……………$56,000
in excess of par value-common stock……………5,700,000
Treasury stock – common………………………3,000
Total additional paid-in capital………………………………………………………………………….……5,759,000
Total paid-in capital……………………………………………………………………………………………….7,999,000
Retained earnings……………………………………………………………………………………………………….560,000
Total paid-in capital and retained earnings…………………………………………………..………….8,559,000
Less: Treasury stock (1,000 common shares)…………………………….………………………………..(22,000)
Total stockholders’ equity…………………………………………………………………………………….$8,537,000
E12-1
Three reasons why companies purchase investments in debt or stock securities are because they may have excess cash on hand, want to generate earnings from investment income, and invest for strategic reasons.
A corporation might have excess cash that it does not need for operations due to reasons such as seasonal fluctuations in sales and economic cycles.
The typical investment when investing cash for short periods of time is a government issued security.
Stockholders’ equity
Paid-in capital
Capital stock
8% Preferred stock, $100 par value
Noncumulative, 40,000 authorized shares
2,400 issued...