ie EView Favorites Tools Help labs ? Balser, Annarose . Outlot O Canvas Connect-

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ie EView Favorites Tools Help labs ? Balser, Annarose . Outlot O Canvas Connect-Nee tab CH. 18 -Homework Problems Help Save & ExitSubemit Check my work 7 Problem 13-12 Various shareholders' equity topics; comprehensive [L018-1, 18-4, 18-5, 18-6, 18-7, 18-8) Part A In late 2017, the Nic stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonp 2018, 2,000,000 shares of the common stock are iss all 1,000,000 shares of preferred stock are issued at $30 per share 10 points klaus Corporation was formed. The corporate chart er authorizes the issuance of 4,000,000 shares of common f $5 par value, noncumulative, nonparticipating preferred stock. On January 2, price of $12 per share. Also on January 2, eBook Print Required: 1. Prepare journal entries to record these transactions 2 Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2018. (Assume net income for the first quarter 2018 was $1,300,000) References Part B During 2018, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2018, the corporation reacquires 150,000 shares for the treasury at a price of $14 per share. b. On July 31, 2018, 25,000 treasury shares are reissued at $17 per share. c. On September 30, 2018, 25,000 treasury shares are reissued at $12 per share. Mc Graw Hill K Prev7 of 8 Next> 941 AM 4/9/2018 Type here to search

Explanation / Answer

2-Jan-18 Cash account Dr          24,000,000 To Common Stock            2,000,000 To Paid in capital, excess of par - Common          22,000,000 (To record Issue of 2,000,000 shares of common stock with par value $1, issue price $12) 2-Jan-18 Cash account Dr          30,000,000 To Preferred Stock            5,000,000 To Paid in capital, excess of par - Preferred          25,000,000 (To record Issue of 1,000,000 shares of preferred stock with par value $5, issue price $30) Nicklaus Corporation Balance Sheet - Shareholders' Equity Section March 31, 2018 Shareholders' Equity Common Stock, $1 par value 4,000,000 shares Authorised, 2,000,000 Issues, 2,000,000 Outstanding            2,000,000 Paid in capital, excess of par - Common          22,000,000 Non cumulative, Non participating Preferred Stock - $5 Parvalue 1,000,000 Authorised and Issued            5,000,000 Paid in capital, excess of par - Preferred          25,000,000 Total Paid in Capital          54,000,000 Retained Earnings            1,300,000 Total Shareholders' Equity          55,300,000 30-Jun-18 Treasury Stock            2,100,000 To Cash account            2,100,000 (To record purchase of 150,000 shares @$14 each) 31-Jul-18 Cash Account dr                425,000 To Treasury Stock                350,000 To Paid in Capital - Treasury stock                  75,000 (To record issue of 25,000 Treasury stock @$17 each) Initial purchase price of treasury stock was 14, it was issued later @17, the difference of $3 for 25,000 shares is credited to a separate account called Paid in Capital Treasury Stock 30-Sep-18 Cash Account dr                300,000 Paid in Capital - Treasury stock Dr                  50,000 To Treasury Stock                350,000 (To record issue of 25,000 Treasury stock @$12 each) Initial purchase price of treasury stock was 14, it was issued later @12, the difference of $2 for 25,000 shares is debited to Paid in Capital Treasury Stock Nicklaus Corporation Balance Sheet - Shareholders' Equity Section September 30, 2018 Shareholders' Equity Common Stock, $1 par value 4,000,000 shares Authorised, 2,000,000 Issues, 1,900,000 Outstanding            2,000,000 Paid in capital, excess of par - Common          22,000,000 Non cumulative, Non participating Preferred Stock - $5 Parvalue 1,000,000 Authorised and Issued            5,000,000 Paid in capital, excess of par - Preferred          25,000,000 Paid in Capital - Treasury stock                  25,000 Total Paid in Capital          54,025,000 Retained Earnings            4,050,000 Subtotal          58,075,000 Less: Treasury Stock (100,000 shares @$14 each)            1,400,000 Total Shareholders' Equity          56,675,000 notes: Net Income March            1,300,000 Jun and Sep            2,750,000 Total            4,050,000 Paid in Capital - Treasury stock Jul 31 Transaction                  75,000 Less: Sep transaction                  50,000 Net                  25,000 Treasury Stock Purchased            2,100,000 Less: Issued in July                350,000 Less: Issued in Sep                350,000 Net            1,400,000 1-Oct-18 No entry for Stock split Number fo shares in Common stock = (2,000,000-100,000)*2 = 3,800,000 1-Nov-18 Retained Earnings Dr                602,000 To Dividends Payable                602,000 (To record dividends declared @0.09 per share on Common Stock and $0.26 per share dividend declared on Preferred Stock) Dividend:                602,000 Common Stock (3,800,000*.09)                342,000 Preferred Stock (1,000,000*.26)                260,000 1-Dec-18 Dividends Payable Dr                602,000 To Cash                602,000 (To record payment of dividends) 2-Dec-18 Retained Earnings dr            1,368,000 To Common Stock - dividend distributable                  57,000 To Paid in capital, excess of par - Common            1,311,000 (To record Stock dividend declared) Stock dividend amount is calculated as follows Number of shares to be issued as Stock dividend                114,000 Market price                           12 Total Value (114,000*12)            1,368,000 Amount credited to Common Stock (Number of shares * par value = 114,000*.5) Balance credited to Paid in capital Excess of par 28-Dec-18 Common Stock - dividend distributable                  57,000 To Common Stock                  57,000 (To record stock dividend issued) Nicklaus Corporation Balance Sheet - Shareholders' Equity Section September 30, 2018 Shareholders' Equity Common Stock, $0.50 par value 8,000,000 shares Authorised, 4,000,000 Issues, 3,914,000 Outstanding            2,057,000 Paid in capital, excess of par - Common          23,311,000 Non cumulative, Non participating Preferred Stock - $5 Parvalue 1,000,000 Authorised and Issued            5,000,000 Paid in capital, excess of par - Preferred          25,000,000 Paid in Capital - Treasury stock                  25,000 Total Paid in Capital          55,393,000 Retained Earnings            4,330,000 Subtotal          59,723,000 Less: Treasury Stock (100,000 shares @$14 each)            1,400,000 Total Shareholders' Equity          58,323,000 Nicklaus Corporation Statement of Shareholders' Equity For the year ended December 31, 2018 ($ in 000;s) Preferred Stock Common Stock Additional Paid in Capital Retained Earnings Treasury Stock Total Shareholders' Equity 2-Jan                        -   Issuance of Preferred Stock 5000             25,000               30,000 Issuance of Common Stock         2,000             22,000               24,000 Purchase of treasury stock      (2,100)               (2,100) Sale of treasury stock                      25            700                     725 Net Income         6,300                 6,300 Common Cash Dividends          (602)                   (602) Common Stock Dividends               57                1,311      (1,368)                        -   Balance as of December 31          5,000         2,057             48,336         4,330      (1,400)               58,323

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