Vermillion Corporation, a publicly traded company, was organized on January 1, 2

ID: 2428714 • Letter: V

Question

Vermillion Corporation, a publicly traded company, was organized on January 1, 2018. It is authorized to issue an unlimited number of $ 3 noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the company’s first year of operations:

Partially correct answer iconYour answer is partially correct.

Record the above transactions for 2018, including any required entries to close dividends declared and net income. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round average cost per share to 2 decimal palces, e.g. 2.25 and final answers to 0 decimal places.)

Transaction entries:

Date

Account Titles and Explanation

Debit

Credit

Jan. 10Mar. 1May 1June 1July 24Sept. 4Nov. 1Nov. 20Dec. 14Dec. 31

July 24

Jan. 10Mar. 1May 1June 1July 24Sept. 4Nov. 1Nov. 20Dec. 14Dec. 31

Nov. 20

Jan. 10Mar. 1May 1June 1July 24Sept. 4Nov. 1Nov. 20Dec. 14Dec. 31

Closing entries:

Date

Account Titles and Explanation

Debit

Credit

Dec. 31

(To close cash dividends)

Dec. 31

Link to eBook Materials

List of Accounts

Incorrect answer iconYour answer is incorrect.

Open T accounts and post to the shareholders’ equity accounts. (Record entries in the order presented in the problem.)

Jan. 10Mar. 1May 1June 1July 24Sept. 4Nov. 1Nov. 20Dec. 14Dec. 31Dec. 31 Bal.Dec. 31 CE

Link to eBook Materials

List of Accounts

Partially correct answer iconYour answer is partially correct.

Prepare the shareholders’ equity section of the statement of financial position at December 31. (Enter account name only and do not provide descriptive information.)

December 31, 2018For the Quarter Ended December 31, 2018For the Year Ended December 31, 2018

Cash DividendsShare CapitalShareholders' EquityTotal Share CapitalTotal Shareholders' Equity

Jan. 10 Issued 940,000 common shares for $ 2 per share. Mar. 1 Issued 22,000 preferred shares for $ 50 per share. May 1 Issued 235,000 common shares for $ 3 per share. June 1 Reacquired and retired 10,000 common shares at $ 2 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction. July 24 Issued 32,100 common shares for $ 119,000 cash and used equipment. The equipment originally cost $ 31,000. It now has a carrying amount of $ 15,500 and a current value of $16,400. The common shares were trading for $4 per share on this date. Sept. 4 Issued 9,000 common shares for $ 5 per share. Nov. 1 Issued 3,600 preferred shares for $ 50 per share. 20 Reacquired and retired 14,000 common shares at $ 4 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction. Dec. 14 Declared a $ 72,000 cash dividend to the preferred shareholders, to shareholders of record on December 31, payable on January 10. 31 Reported net income of $ 1,320,000 for the year.

Explanation / Answer

Formula sheet

A B C D E F G H 2 3 Journal entries will be as follows: 4 5 Date Account Debit Credit 6 10-Jan Cash (940000*$2) $1,880,000 7 Common Stock $1,880,000 8 9 1-Mar Cash (22,000*$50) $1,100,000 10 Preferred Stock $1,100,000 11 12 1-May Cash (235,000*$3) $705,000 13 Common Stock $705,000 14 15 Total Value of Common Stock $2,585,000 16 Total Number of Common Stock 1,175,000 17 18 Average cost of reacquired share $2.20 19 20 Journal entry to reacquire the common stock: 21 Date Account Debit Credit 22 1-Jun Treasury Stock (10,000*$2) $20,000 23 Cash $20,000 24 25 Journal Entry to retire common stock: 26 Date Account Debit Credit 27 1-Jun Common Stock (10,000*$2.20) $22,000 28 Treasury Stock $20,000 29 Retained Earnings $2,000 30 31 Journal entry to issue common shares 32 Date Account Debit Credit 33 24-Jun Cash $119,000 34 Equipment $31,000 35 Accumulated Depreciation $15,500 36 Common Stock $134,500 37 38 Date Account Debit Credit 39 4-Sep Cash (9000*$5) $45,000 40 Common Stock $45,000 41 42 1-Nov Cash (3600*$50) $180,000 43 Preferred Stock $180,000 44 45 Total Value of Common Stock $2,742,500 46 Total Number of Common Stock 1,206,100 47 48 Average cost of reacquired share $2.27 49 50 Journal entry to reacquire the common stock: 51 Date Account Debit Credit 52 1-Nov Treasury Stock (14,000*$4) $56,000 53 Cash $56,000 54 55 Journal Entry to retire common stock: 56 Date Account Debit Credit 57 20-Nov Common Stock (14,000*$2.27) $31,834 58 Retained Earnings $24,166 59 Treasury Stock $56,000 60 61 Journal entry for cash dividends to preferred shareholders: 62 Date Account Debit Credit 63 14-Dec Preferred Dividends $72,000 64 Preferred Dividends Payable $72,000 65 66 Closing entry for cash dividends 67 Date Account Debit Credit 68 31-Dec Retained Earnings $72,000 69 Preferred Dividends $72,000 70 71 Closing entry for net income 72 Date Account Debit Credit 73 14-Dec Net Income $1,320,000 74 Retained Earnings $1,320,000 75

Navigate

Vermilion eyes (v), crossveinless wings (cv). and singed bristles (m) are three

Vermont Company uses continuous processing to produce stuffed bears and FIFO pro

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.

Vermillion Corporation, a publicly traded company, was organized on January 1, 2

Question

Explanation / Answer

Related Questions

Navigate