In late 2015, the Nicklaus Corporation was formed. The corporate charter authori
ID: 2562964 • Letter: I
Question
In late 2015, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2016, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $25 per share
1. Record issue of common shares. Journal entry
2. Record issue of preferred shares. journal entry
3. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2016. (Assume net income for the first quarter 2016 was $1,250,000
On September 30, 2016, 20,000 treasury shares are reissued at $10 per share
Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2016. (Assume net income for the second and third quarter was $2,700,000.
Part AIn late 2015, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2016, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $25 per share
1. Record issue of common shares. Journal entry
2. Record issue of preferred shares. journal entry
3. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2016. (Assume net income for the first quarter 2016 was $1,250,000
Shareholders equity Sheet ? ? ? ? Total Shareholders Equity ? During 2016, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2016, the corporation reacquires 140,000 shares for the treasury at a price of $12 per share. b. On July 31, 2016, 20,000 treasury shares are reissued at $15 per share. c.On September 30, 2016, 20,000 treasury shares are reissued at $10 per share
Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2016. (Assume net income for the second and third quarter was $2,700,000.
Explanation / Answer
Answer 1 Journal entry to record issue of common shares Date Account Titles Debit Credit Jan.2,2016 Cash $20,000,000 Common stock $2,000,000 Paid in Capital in excess of Par - Common stock $18,000,000 Answer 2 Journal entry to record issue of preferred shares Date Account Titles Debit Credit Jan.2,2016 Cash $25,000,000 Preferred Stock $5,000,000 Paid in Capital in excess of Par - Preferred stock $20,000,000 Answer 3 The shareholders' equity section of the Nicklaus balance sheet as of March 31, 2016 Common stock (40,00,000 shares Authorised, 20,00,000 shares issued and paid up @ $1 par) $2,000,000 Preferred stock (10,00,000 non cumutaive shares Authorised, 10,00,000 shares issued and paid up @ $5 par) $5,000,000 Paid in Capital in excess of Par - Common stock $18,000,000 Paid in Capital in excess of Par - Preferred stock $20,000,000 Total Contributed Capital $45,000,000 Retained Earnings $1,250,000 Total Shareholders Equity $46,250,000 Answer 4a Journal entry to record reacquisition of 140,000 shares for the treasury at a price of $12 per share. Date Account Titles Debit Credit June 30,2016 Treasury Stock $1,680,000 Cash $1,680,000 Answer 4b Journal entry to record 20,000 treasury shares are reissued at $15 per share. Date Account Titles Debit Credit July 31,2016 Cash $300,000 Treasury Stock $240,000 Paid in Capital in excess of Par - Common stock $60,000 Answer 4c Journal entry to record 20,000 treasury shares are reissued at $10 per share. Date Account Titles Debit Credit Sep.30,2016 Cash $200,000 Paid in Capital in excess of Par - Common stock $40,000 Treasury Stock $240,000 Answer 4d The shareholders' equity section of the Nicklaus balance sheet as of Sep.30,2016 Common stock (40,00,000 shares Authorised, 20,00,000 shares issued and paid up @ $1 par) $2,000,000 Preferred stock (10,00,000 non cumutaive shares Authorised, 10,00,000 shares issued and paid up @ $5 par) $5,000,000 Paid in Capital in excess of Par - Common stock $18,020,000 Paid in Capital in excess of Par - Preferred stock $20,000,000 Treasury Stock -$1,200,000 Total Contributed Capital $45,020,000 Retained Earnings $3,950,000 Total Shareholders Equity $48,970,000
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