QUESTION 1 Credit Paid-in capital 1,560,000 Debit common stock-1,600,000 Credit

Question

QUESTION 1 Credit Paid-in capital 1,560,000 Debit common stock-1,600,000 Credit cash- 1,600,000 ODebit cash -1,600,000 Credit common stock- 40,000cbr>Credit paid-in capital 1,560,000 Debit cash- 1,600,000 Credit common stock - 1,600,000 QUESTION 2 7 points Save Answer el--RsQ 002->Jackson Health Foods has 8,000 shares of $2 par common stock outstanding, which was issued at $15 per share. Jackson also has a balance in Retained earnings of $86,000. How much is Jackson's total stockholders' equity? 16,000 120,000 $206,000 $34,000 QUESTION 3 7 points Save Answer e RsQ003 >Winston corporation has 9.000 shares of 4% sio par cumulative preferred stock Winston declared no dividends in 2011. In 2012, Winston declares a total dividends of $ 84000. How much would go to the preferred stock? paying $3,600 per year and 47,000 shares of common stock outstanding. 3,600 5 7,200 $ 84,000 O None, it all goes to common QUESTION 4 7 points Save Answer Preferred stock may have which of the following features? Dividend preference Preference to assets in the event of lquidation. Cumulative dividends

Explanation / Answer

1)

cash received = 400000 shares x $4 per share = $1600000

par value of Common stock = 400000 shares x $0.10 per share = $40000

paid in capital = 1600000 - 40000= $1560000

Correct entry:

Cash Dr. $1600000

Common Stock Cr. $40000

Paid in capital Cr. $1560000

2)

par value of common stock issued = 8000 shares x $2 per share = $16000

Paid in capital in excesss of par value

= Issue price - par value of shares

= 8000 shares x $15/share - $ 16000

= $104000

Total stockholder's equity

= common stock + paid in capital in excess of par value + retained earnings

= $16000 + $104000 + $ 86000

= $206000

3)

As the preferred stocks are cumulative, the dividend due for the year 2011 will also be paid along with the dividend of 2012, in which the company has declared dividend.

Dividend to the preferred stock = 3600 + 3600 = $7200

4)

All of the above

5)

The preferred stockholders will be paid the dividend as they enjoy the devidend preference to the common stockholders and thereafter the balance of the total, if there is any, will be paid to the common stock holders.

The dividend that would be paid to the common stockholders

= $3750000 - $240000 = $ 135000

6)

declaration date and the payment date

There will be no entry on the recod date.

7)

cash received = 1000 shares x $12 per share = $ 12000

par value of Common stock = 1000 shares x $10 per share = $10000

paid in capital = 120000 - 10000= $ 2000

Answer:

Common Stock - $10000, and

Paid in capital in excess of par value - $2000

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