Q1. On Dec 31 2017, ABC Co. has outstanding $500,000 face amount, 9%, 20-year convertible bonds that pay interest semiannually. After semiannual amortization on Dec. 31, 2017, the remaining bond premium is $8,000. On the first day of the next fiscal year ( January 1, 2018), 50% (half) of the bonds are converted to 750 shares of $50 par value common stock. The market value of the shares issued is $250,000. Prepare the necessary journal entry to record the conversion of the bonds.
Q2. On January 1, 2016 Vera Co. had 100,000 shares of $5 par common stock outstanding. The following transactions took place during 2016. Vera declared and issued a 20% stock dividend on March 15. On July 1, Vera purchased 10,000 shares of its common stock . On October 1, Vera issued 14,000 shares for cash.
(a) What is the total number of shares outstanding as of Dec. 31
(b) What is the weighted-average number of shares outstanding as of Dec. 31
(c) On Dec 31 2016 Vera Co had a Net Income of $350,000 and declared preferred dividends of $85,000. Calculate the Earnings Per share for 2016.
Q3. As of January 2016, Vera Co has 6% Preferred stock, $100 par value 10,000 shares issued and outstanding; Common stock, $5 par value, 100,000 shares issued and outstanding.
The following dividends were declared and paid in 2016, 2017 and 2018
2015 No dividends were declared and paid
2016 $15,000
2017 $40,000
2018 $110,000
a) Assuming the preferred stock were non-cumulative, how much dividends did preferred and common stockholders receive for each year dividends were declared.
b) Calculate Dividend Per Share for each year.
c) Assuming the preferred stock were cumulative, how much dividends did preferred and common stockholders receive for each year dividends were declared.
d) Calculate Dividend Per Share for each year
Q4. On January 1, 2017, Vera Corporation had 60,000 shares of $5 par value common stock issued and outstanding and 10,000 6% cumulative preferred stock issued and outstanding. During the year, the following transactions occurred:
1-Mar Declared a 15% stock dividend on outstanding common stock. The market price per share as of March 1 is $17
April 10. The 15% stock dividend declared on March 1 was issued to the common stockholders.
May 10. Declared a 30% stock dividend on outstanding common stock. The market price per share as of May 10 is $15
30-May The 30% stock dividend declared on May 10 was issued to the common stockholders. The market price of the shares on that date is $25
5-Jun A 2 for 1 stock split was announced for stock holders on record as of July 30. The market price of the share was $45 on June 5
15-Jun Declared a cash dividend of $2.00 per share to stockholders of record on July 15.
15-Aug Paid the $2.00 cash dividend.
1-Sep Declared a cash dividend to preferred stockholders of record on October 15
31-Oct Paid preferred stockholders' dividend declared on September 1.
Instructions -
a. Prepare journal entries to record each of the above transactions. If no entry is required, indicate so.
b. Prepare all closing entries at year-end.