During 2016, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2016, the corporation reacquires 200,000 shares for the treasury at a price of $12 per share. b. On July 31, 2016, 50,000 treasury shares are reissued at $15 per share. c. On September 30, 2016, 50,000 treasury shares are reissued at $10 per share. Required: 1. Prepare journal entries to record these transactions. 2. 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 $3,000,000.)

During 2016, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2016, the corporation reacquires 200,000 shares for the treasury at a price of $12 per share. b. On July 31, 2016, 50,000 treasury shares are reissued at $15 per share. c. On September 30, 2016, 50,000 treasury shares are reissued at $10 per share. Required: 1. Prepare journal entries to record these transactions. 2. 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 $3,000,000.)

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 4CPP: Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31,...

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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 0 par common stock at 0, receiving cash. b. Issued 4,000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 375. The bonds are classified as a held- to-maturitv long-term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0.60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 545, including commission. p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method, q. Accrued interest for three months on the Dream Inc. bonds purchased in (1). r. Pinkberry Co. recorded total earnings of 240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39.02 per share on December 31, 2016. The investment is adjusted to fair value, using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. Instructions Journalize the selected transactions. After all of the transactions for the year ended December 31, 2016, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step income statement for the year ended December 31, 2016, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. (Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 2016. c. Prepare a balance sheet in report form as of December 31, 2016. Income statement data: Advertising expense 150,000 Cost of merchandise sold 3,700,000 Delivery expense 30,000 Depreciation expense -office buildings and equipment 30,000 Depreciation expensestore buildings and equipment 100,000 Dividend revenue 4,500 Gain on sale of investment 4,980 Income from Pinkberry Co. investment 76,800 Income tax expense 140,500 Interest expense 21,000 Interest revenue 2,720 Miscellaneous administrative expense 7.500 Miscellaneous selling expense 14,000 Office rent expense 50,000 Office salaries expense 170,000 Office supplies expense 10,000 Sales 5,254,000 Sales commissions 185,000 Sales salaries expense 385,000 Store supplies expense 21,000 Retained earnings and balance sheet data: Accounts payable 194,300 Accounts receivable 545,000 Accumulated depreciationoffice buildings and equipment 1,580,000 Accumulated depreciationstore buildings and equipment 4,126,000 Allowance for doubtful accounts 8,450 Available for sale investments (at cost) 260,130 Bonds payable. 5%. due 2024 500,000 Cash 246,000 Common stock, 20 par (400,000 shares authorized; 100,000 shares issued. 94,600 outstanding) 2,000,000 Dividends: Cash dividends for common stock 155,120 Cash dividends for preferred stock 100,000 Goodwill 500,000 Income tax payable 44,000 Interest receivable 1,125 Investment in Pinkberry Co. stock (equity method) 1,009,300 Investment in Dream Inc. bonds (long term) 90,000 Merchandise inventory [December 31, 2016). at lower of cost (FIFO) or market 778,000 Office buildings and equipment 4.320,000 Paid-in capital from sale of treasury stock 13,000 Excess of issue price over parcommon stock 886,800 Excess of issue price over parpreferred stock 150,000 Preferred 5% stock. 80 par (30,000 shares authorized; 20,000 shares issued] 1,600,000 Premium on bonds payable 19,000 Prepaid expenses 27,400 Retained earnings, January 1, 2016 9,319,725 Store buildings and equipment 12,560,000 Treasury stock (5,400 shares of common stock at cost of 33 per share) 178,200 Unrealized gain (loss) on available for sale investments (6,500) Valuation allowance for available for sale investments (6,500)
During 2018, the Nicklaus Corporation participated in three treasury stock transactions:a. On June 30, 2018, the corporation reacquires 200,000 shares for the treasury at a price of $12 per share.b. On July 31, 2018, 50,000 treasury shares are reissued at $15 per share.c. On September 30, 2018, 50,000 treasury shares are reissued at $10 per share.Required:1. Prepare journal entries to record these transactions.2. Prepare the Nicklaus Corporation shareholders’ equity section as it would appear in a balance sheet preparedat September 30, 2018. (Assume net income for the second and third quarter was $3,000,000.)
Cool Company has decided to take their company public on January 1, 2014. Cool company had 1,000 shares authorized. The following transactions occurred. e.) on January 1, 2016, cool company re-issued 1,000 shares of treasury stock at a price of $30 per share. Record the journal entry for this share reissuance. Question: Does the share reissuance in (e) (problem above) affect the income statement? Why or why not?
The annual report for Colonel Grains disclosed that 1 billion shares of common stock have been authorized. At the beginning of 2017, 790 million shares had been issued and the number of shares in treasury stock was 107 million. During 2017, the only common share transactions were that 15 million common shares were reissued from treasury and 26 million common shares were purchased and held as treasury stock. Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2017. (Enter your answers in millions.) Answer is complete but not entirely correct. Number of Common Shares (in millions) (a) Issued Stock (b) Treasury Stock (c) Shares Outstanding 755,000 108,000 647,000
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: Record on journal page 10: Jan. 3 Issued 15,000 shares of $20 par common stock at $30, receiving cash. Feb. 15 Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. May 1 Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. 16 Declared a dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. Journalize this transaction as a single entry. 26 Paid the cash dividends declared on May 16. Jun. 1 Purchased 7,500 shares of Solstice Corp. at $40 per share, plus a $150 brokerage commission. The investment is classified as an available-for-sale investment. 8 Purchased 8,000 shares of treasury common stock at $33 per share.…
Cool Company has decided to take their company public on January 1, 2014. Cool company had 1,000 shares authorized. The following transactions occurred. e.) on January 1, 2015, cool company re-issued 1,000 shares of treasury stock at a price of $30 per share. Record the journal entry for this share reissuance. Label debits and credits and include classification of each account. f.) on March 30, 2016, Cool company reissued 500 shares of treasury stock at a price of $20 per share. Record the journal entry for this share reissuance. Make sure to clearly label debits and credits and include the classification of each account.
The annual report for CornFlower Ranch disclosed that 1 billion shares of common stock have been authorized. At the beginning of 2017, 815 million shares had been issued and the number of shares in treasury stock was 112 million. During 2017, the only common share transactions were that 16 million common shares were reissued from treasury and 31 million common shares were purchased and held as treasury stock. Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2017. (Enter your answers in millions.) (a) Issued Stock (b) Treasury Stock (c) Shares Outstanding Number of Common Shares (in millions)
The annual report for General Mills disclosed that 1 billion shares of common stock have been authorized. At the beginning of 2017, 755 million shares had been issued and the number of shares in treasury stock was 178 million. During 2017, the only common share transactions were that 11 million common shares were reissued from treasury and 27 million common shares were purchased and held as treasury stock. Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2017. (Enter your answers in millions.) (a) Issued Stock (b) Treasury Stock (c) Shares Outstanding Number of Common Shares (in millions) 194
SHOW THE JOURNAL ENTRY FOR EACH TRANSACTIONS Your inquiries and investigation revealed the following transactions, which occurred in 2019: a. On January 15, the company reacquired 20, 000 ordinary shares (from the 2018 issue) at P22 per share and reverted them to treasury since it intends to reissue the same. b. On February 11, the company reissued 4,000 treasury shares at P28 per share. c. On March 5, the company reissued 6,000 treasury shares at P19 per share. d. On April 1, the company retired 5,000 treasury shares. e. On May 12, 20,000 preference shares were converted to ordinary shares. f. On June 9, 15,000 shares were subscribed for a total amount of P175,000 g. On July 4, a 2 for 1 share split was affected for the ordinary share. h. On August 8, the company reissued 3,000 treasury shares at P8 per share. i. The company issued 4,000 ordinary shares for P11 per share. j. The company registered an adjustments net income in 2019 at P830,000.
Using the following information, the journal entry to record the March 5, 2016 transaction will be: January 1, Pacific Corporation reacquires 2,000 2016: shares of its $10 par common stock for $44 per share. March 5, 2016: A) B) Cash Cash Cash Cash Pacific reissues 1,000 of the above mentioned shares for $50 per share. Treasury Stock Investment income on treasury stock Treasury Stock Paid in capital, treasury stock Treasury Stock Paid in capital, treasury stock Treasury Stock Gain on sale of treasury stock 50,000 50,000 50,000 50,000 44,000 6,000 10,000 40,000 44,000 6,000 44,000 6,000
Check my work The annual report for Mega Mills disclosed that 1 billion shares of common stock have been authorized. At the beginning of 2017, 785 million shares had been issued and the number of shares in treasury stock was 96 million. During 2017, the only common share transactions were that 19 million common shares were reissued from treasury and 25 million common shares were purchased and held as treasury stock. Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2017. (Enter your answers in millions.) Number of Common Shares (in millions) |(a) Issued Stock |(b) Treasury Stock |(c) Shares Outstanding
In 2018, Western Transport Company entered into the treasury stock transactions described below. In 2016, Western Transport had issued 140 million shares of its $1 par common stock at $17 per share.Required:Prepare the appropriate journal entry for each of the following transactions:1. On January 23, 2018, Western Transport reacquired 10 million shares at $20 per share.2. On September 3, 2018, Western Transport sold 1 million treasury shares at $21 per share.3. On November 4, 2018, Western Transport sold 1 million treasury shares at $18 per share.