Complete each question record transactions Question 1 Hernandez Company had the
ID: 2379280 • Letter: C
Question
Complete each question record transactions
Question 1
Hernandez Company had the following stock transactions during the year:
Issued 25,000 shares of $1 par common stock for $25,000.
Issued 20,000 shares of $1 par common stock for $22,000 cash.
Issued 22,000 shares of $1 par common stock for $21,000 cash.
Issued 2,000 shares of $50 par, 8% preferred stock for $100,000 cash.
Issued 1,000 shares of $50 par, 8% preferred stock for $49,000 cash.
Issued 1,000 shares of $50 par 8% preferred stock for $51,500
Issued 2,500 shares of no-par common stock for $11,875 cash
Issued 1,500 shares of no par 7% preferred stock for $72,000 cash.
Question 2
Kris Kraft Stores had the following stock transactions during the year.
Issued 4,000 shares of no par common stock with a stated value of $10 per share for $40,000 cash.
Issued 6,000 shares of no par common stock with a stated value of $8 per share for $50,000 cash.
Issued 5,000 shares of no par 6% preferred stock with a stated value of $15 per share for $75,000 cash.
Issued 3,000 shares of no par 6% preferred stock with a stated value of $20 per share for $58,000 cash.
Issued 10,000 shares of $8 par common stock with a $9 fair market value for a building with an uncertain fair market value.
Issued 10,000 shares of $5 common stock for land with a fair market value of $50,000.
Issued 8,000 shares of $50 par, 8% preferred stock for land with a fair market value of $405,000.
Question 3
During the year ended December 21, 2013, Smith Company completed the following transactions:
04/15 Declared a semiannual dividend of $0.80 per share on preferred stock and $0.05 per share on common stock to shareholders of record on 05/05, payable on 05/10. Currently, 4,000 shares of $100 par preferred stock and 50,000 shares of $1 par common stock are outstanding.
05/05 Record date of record entry.
05/10 Paid cash dividends.
10/15 Declared semiannual dividend of $0.80 per share on preferred stock and $0.50 per share on common stock to shareholders of record on November 5, payable on November 20.
11/5 Record date of record entry.
11/20 Paid cash dividends
11/22 Declared a 10% stock dividend to shareholders of record on December 8, distributable on December 16. Market value of the common stock was estimated to be $8.
12/08 Record date of record entry.
12/16 issued certificated for common stock dividend.
12/20 Board of directors declared a two for one common stock split.
Explanation / Answer
Question 1
Hernandez Company had the following stock transactions during the year:
Issued 25,000 shares of $1 par common stock for $25,000.
mmddyy Cash Dr 25000
Comon Stock Cr 25000
Issued 20,000 shares of $1 par common stock for $22,000 cash.
mmddyy Cash Dr 22000
Common stock Cr 20,000
Paid-in capital - excess of par Cr 2000
Issued 22,000 shares of $1 par common stock for $21,000 cash.
mmddyy Cash Dr 21000
Paid-in capital - excess of par Dr 1000
Common Stock Cr 22000
Issued 2,000 shares of $50 par, 8% preferred stock for $100,000 cash.
mmddyy Cash Dr 100,000
8% Pref Stock Cr 100,000
Issued 1,000 shares of $50 par, 8% preferred stock for $49,000 cash.
mmddyy Cash Dr 49000
Paid-in Pref capital - excess of par Dr 1000
8% Pref Stock Cr 50,000
Issued 1,000 shares of $50 par 8% preferred stock for $51,500
mmddyy Cash Dr 51,500
8% Pref Stock Cr 50,000
Paid-in Pref capital - excess of par Cr 1500
Issued 2,500 shares of no-par common stock for $11,875 cash
mmddyy Cash Dr 11875
Common Stock No par Cr 11875
Issued 1,500 shares of no par 7% preferred stock for $72,000 cash.
mmddyy Cash Dr 72000
7% Pref Stcok No Par Cr 72000
Question 2
Kris Kraft Stores had the following stock transactions during the year.
Issued 4,000 shares of no par common stock with a stated value of $10 per share for $40,000 cash.
mmddyy Cash Dr 40000
Common Stock no par Cr 40,000
Issued 6,000 shares of no par common stock with a stated value of $8 per share for $50,000 cash.
mmddyy Cash Dr 50,000
COmmon Stock Cr 48000
Paid-in capital - excess of par Cr 2000
Issued 5,000 shares of no par 6% preferred stock with a stated value of $15 per share for $75,000 cash.
mmddyy Cash Dr 75,000
pref stock Cr 75000
Issued 3,000 shares of no par 6% preferred stock with a stated value of $20 per share for $58,000 cash.
mmddyy Cash Dr 58000
Paid-in Pref capital - excess of par Dr 2000
Pref Stock Cr 60,000
Issued 10,000 shares of $8 par common stock with a $9 fair market value for a building with an uncertain fair market value.
mmddyy Building Dr 90,000
Common stock Cr 80,000
Paid-in capital - excess of par Cr 10,000
Issued 10,000 shares of $5 common stock for land with a fair market value of $50,000.
mmddyy Land Dr 50,000
Common stock Cr 50,000
Issued 8,000 shares of $50 par, 8% preferred stock for land with a fair market value of $405,000.
mmddyy Land Dr 405,000
Pref Stock Cr 400,000
Paid-in Pref capital - excess of par Cr 5000
Question 3
During the year ended December 21, 2013, Smith Company completed the following transactions:
04/15 Declared a semiannual dividend of $0.80 per share on preferred stock and $0.05 per share on common stock to shareholders of record on 05/05, payable on 05/10. Currently, 4,000 shares of $100 par preferred stock and 50,000 shares of $1 par common stock are outstanding.
04/15 Retained Earnings Dr 5700
Dividend Payable Cr 2500
Pref Dividend Cr 3200
(Record Div declared $0.80*4000 = $3200, Common stock 0.05*50,000 = $2500 )
05/05 Record date of record entry.
No Entry
05/10 Paid cash dividends.
05/10 Dividend Payable Dr 2500
Pref Dividend Dr 3200
Cash Cr 5700
10/15 Declared semiannual dividend of $0.80 per share on preferred stock and $0.50 per share on common stock to shareholders of record on November 5, payable on November 20.
10/15 Retained Earnings Dr 28,200
Dividend Payable Cr 25000
Pref Dividend Cr 3200
(Record Div declared $0.80*4000 = $3200, Common stock 0.50*50,000 = $25000 )
11/5 Record date of record entry.
No Entry
11/20 Paid cash dividends
11/20 Dividend Payable Dr 25,000
Pref Dividend Dr 3200
Cash Cr 28,200
11/22 Declared a 10% stock dividend to shareholders of record on December 8, distributable on December 16. Market value of the common stock was estimated to be $8.
(No of sahres o/s 50,000. So 10% Stock Div = 10%*50,000 = 5000 shares)
1 Jul REtaied earning Dr 40,000
Common Stock Cr 5000
Paidin Capi in excess Cr 35000
(5000 shares x $8 = 40,000 & at Par 5000*1 = 5000)
12/08 Record date of record entry.
No Entry
12/16 issued certificated for common stock dividend.
No Entry
12/20 Board of directors declared a two for one common stock split.
No entry...No of shares only will change from 50000 of $1 to 100,000 of $0.50 each
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