Assignment:
Question 1: During its first year of operations Klump Corporation had the following transactions pertaining to its common stock.
Jan 10 Issued 70,000 shares for cash at $5 per share
July 1 Issued 40,000 shares for cash at $8 per share
(a) Journalize the transactions assuming that the common stock has a par value of $5 per share
(b) Journalize the transactions assuming that the common stock has a no-par with a stated value of $1 per share
Question 2: Garza Co. had the following transactions during the current period.
Mar 2 - Issued 5,000 shares of $1 par value common stock to attorneys in payment of a bill for
$30,000 for services provided in helping the company to incorporate.
June 12 - Issued 60,000 shares of $1 par value common stock for cash of $375,000
July 11 - Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share
Nov 28 - Purchased 2,000 shares of treasury stock for $80,000
Journalize the above transactions.
Agler and Carl Firm has encounter the following situations in auditing different clients.
1) Desi Corporation is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land by issuing 5,000 shares of its $20 par value common stock. The owners' asking price for the land was $120,000 and the fair market value of the land was $110,000.
2) Lucille Corporation is a publicly held corporation whose common stock is traded on the Securities markets. One June 1, it acquired land by issuing 20,000 shares of its $10 par value stock. At the time of the exchange the land was advertised for sale at $250,000. The stock was selling at $11 per share.
Prepare the journal entries for each of the above situations
On January 1, 2005 the stockholders' equity section of Rowen Corporation shows:
Common Stock ($5 par value) $1,500,000; paid-in capital in excess of par value $1,000,000 and retained earnings $1,200,000. During the year the following treasury stock transactions occurred:
Mar 1- Purchased 50,000 shares for cash at $16 per share
July 1 - Sold 10,000 treasury shares for cash at $ 17 per share
Sept 1 - Sold 8,000 treasury shares for cash at $15 per share.
a) Journalize the treasury stock transactions
b) Restate the entry for Sept 1, assuming the treasury shares were sold at $13 per share.
Question 3: Flores Corporation : Entries made during the first month by the new accountant for the corporation's capital stock.
May 2 Cash 120,000
Capital stock 120,000
(Issued 10,000 shares of $10 par value
common stock at $12 per share)
10 Cash 600,000
Capital stock 600,000
(Issued 10,000 shares of $50 par value
preferred stock at $60 per share)
15 Capital Stock 14,000
Cash 14,000
( Purchased 1,000 shares of common stock
for the treasury at $14 per share)
31 Cash 8,000
Capital Stock 5,000
Gain on Sale of Stock 3,000
(Sold 500 shares of treasury stock at $16
per share)
On the basis of the explanation for each entry, prepare the entry that should have been made for the capital stock transaction.