Week 2 exercises assignment – 10 problems

FIND A SOLUTION AT Academic Writers Bay

WEEK 2 EXERCISES ASSIGNMENT
 
Exercise 15-1
During its first year of operations, Collin Raye Corporation had the following transactions pertaining to its common stock.
 
Jan. 10 Issued 80,000 shares for cash at $6 per share.
Mar. 1 Issued 5,000 shares to attorneys in payment of a bill for $35,000 for services rendered in helping the company to incorporate.
July 1 Issued 30,000 shares for cash at $8 per share.
Sept. 1 Issued 60,000 shares for cash at $10 per share.
 
(a) Prepare the journal entries for these transactions, assuming that the common stock has a par value of $5 per share.
(b) Prepare the journal entries for these transactions, assuming that the common stock is no-par with a stated value of $3 per share.
 
(Credit account titles are automatically indented when 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.)
Date Account Titles and Explanation Debit Credit
(a) Jan. 10
Mar. 1
July 1
Sept. 1
(b) Jan. 10      
Mar. 1
July 1
Sept. 1
 
Exercise 15-6
Lindsey Hunter Corporation is authorized to issue 50,000 shares of $5 par value common stock.
 
During 2014, Lindsey Hunter took part in the following selected transactions.
1. Issued 5,000 shares of stock at $45 per share, less costs related to the issuance of the stock totaling $7,000.
2. Issued 1,000 shares of stock for land appraised at $50,000. The stock was actively traded on a national stock exchange at approximately $46 per share on the date of issuance.
3. Purchased 500 shares of treasury stock at $43 per share. The treasury shares purchased were issued in 2010 at $40 per share.
(a) Prepare the journal entry to record item 1.
(b) Prepare the journal entry to record item 2.
(c) Prepare the journal entry to record item 3 using the cost method.
(Credit account titles are automatically indented when 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.)
 
No. Account Titles and Explanation Debit Credit
(a)
(b)
(c)
 
 
Exercise 15-14
The stockholders’ equity accounts of G.K. Chesterton Company have the following balances on December 31, 2014.
Common stock, $10 par, 300,000 shares issued and outstanding                    $3,000,000
Paid-in capital in excess of par—common stock                                             1,200,000
Retained earnings                                                                                5,600,000
 
Shares of G.K. Chesterton Company stock are currently selling on the Midwest Stock Exchange at $37.
Prepare the appropriate journal entries for each of the following cases. (Credit account titles are automatically indented when 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.)
 
(a) A stock dividend of 5% is (1) declared and (2) issued.
(b) A stock dividend of 100% is (1) declared and (2) issued.
(c) A 2-for-1 stock split is (1) declared and (2) issued.
 
No. Account Titles and Explanation Debit Credit
(a) (1)
(a) (2)
(b) (1)
(b) (2)
(c) (1)
(c) (2)
 
Exercise 15-18
Anne Cleves Company reported the following amounts in the stockholders’ equity section of its December 31, 2013, balance sheet.
Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued)                    $200,000
Common stock, $5 par (100,000 shares authorized, 20,000 shares issued)                 100,000
Additional paid-in capital                                                                                            125,000
Retained earnings                                                                                                        450,000
   Total                                                                                                                                     $875,000
 
During 2014, Cleves took part in the following transactions concerning stockholders’ equity.
 
1. Paid the annual 2013 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2013.
2. Purchased 1,700 shares of its own outstanding common stock for $40 per share. Cleves uses the cost method.
3. Reissued 700 treasury shares for land valued at $30,000.
4. Issued 500 shares of preferred stock at $105 per share.
5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share.
6. Issued the stock dividend.
7. Declared the annual 2014 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2015.
 
(a) Prepare journal entries to record the transactions described above. (Credit account titles are automatically indented when 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.)
No. Account Titles and Explanation Debit Credit
(b) Prepare the December 31, 2014, stockholders’ equity section. Assume 2014 net income was $330,000. (Enter account name only .Do not provide any descriptive information.)
 
 
Exercise 16-2
Aubrey Inc. issued $4,000,000 of 10%, 10-year convertible bonds on June 1, 2014, at 98 plus accrued interest. The bonds were dated April 1, 2014, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis.
On April 1, 2015, $1,500,000 of these bonds were converted into 30,000 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion.
 
(a) Prepare the entry to record the interest expense at October 1, 2014. Assume that accrued interest payable was credited when the bonds were issued.
 
(b) Prepare the entry to record the conversion on April 1, 2015. (Book value method is used.) Assume that the entry to record amortization of the bond discount and interest payment has been made.
 
(Credit account titles are automatically indented when 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 answers to 0 decimal places, e.g. $3,500.)
No. Account Titles and Explanation Debit Credit
 
Exercise 16-7
Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000. The bonds sold in the market at issuance for $152,000.
(a) What entry should be made at the time of the issuance of the bonds and warrants? (Credit account titles are automatically indented when 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.)
Account Titles and Explanation Debit Credit
(b) Prepare the entry if the warrants were nondetachable. (Credit account titles are automatically indented when 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.)
 
Exercise 17-2
On January 1, 2013, Dagwood Company purchased at par 12% bonds having a maturity value of $300,000. They are dated January 1, 2013, and mature January 1, 2018, with interest receivable December 31 of each year. The bonds are classified in the held-to-maturity category.
 
(a) Prepare the journal entry at the date of the bond purchase.
(b) Prepare the journal entry to record the interest received for 2013.
(c) Prepare the journal entry to record the interest received for 2014.
 
(Credit account titles are automatically indented when 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.)
No. Date                      Account Titles and Explanation                       Debit    Credit
(a)  Jan. 1, 2013
(b) Dec. 31, 2013
(c) Dec. 31, 2014
 
Exercise 17-4
On January 1, 2013, Hi and Lois Company purchased 12% bonds, having a maturity value of $300,000, for $322,744.44. The bonds provide the bondholders with a 10.00% yield. They are dated January 1, 2013, and mature January 1, 2018, with interest receivable December 31 of each year. Hi and Lois Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.
2013    $320,500         2016    $310,000
2014    $309,000         2017    $300,000
2015    $308,000
 
(a) Prepare the journal entry at the date of the bond purchase.
(b) Prepare the journal entries to record the interest received and recognition of fair value for 2013.
(c) Prepare the journal entry to record the recognition of fair value for 2014.
(Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when 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.)
 
No. Date Account Titles and Explanation Debit Credit
(a) Jan. 1, 2013
(b) Dec. 31, 2013
Dec. 31, 2013
(c) Dec. 31, 2014
 
Exercise 17-7
On December 21, 2013, Bucky Katt Company provided you with the following information regarding its trading securities.
 
December 31, 2013
Investments (Trading)              Cost                 Fair Value        Unrealized Gain (Loss)
Clemson Corp. stock               $20,000           $19,000           $(1,000)
Colorado Co. stock                  10,000                         9,000               (1,000)
Buffaloes Co. stock                 20,000                         20,600                         600
Total of portfolio                     $50,000           $48,600           (1,400)
Previous fair value adjustment balance                                                0
Fair value adjustment—Cr.                                                      $(1,400)
 
During 2014, Colorado Company stock was sold for $9,400. The fair value of the stock on December 31, 2014, was Clemson Corp. stock—$19,100; Buffaloes Co. stock—$20,500.
 
(a) Prepare the adjusting journal entry needed on December 31, 2013.
(b) Prepare the journal entry to record the sale of the Colorado Company stock during 2014.
(c) Prepare the adjusting journal entry needed on December 31, 2014.
 
(Credit account titles are automatically indented when 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.)
Exercise 17-13
Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income in dividends each year.
Use the information in the following T-account for the investment in Sub to answer the following questions.
Investment in Sub Co.
1,000,000 
110,000 
                        44,000
 
(a) How much was Parent Co.’s share of Sub Co.’s net income for the year?
Net income $
 
(b) How much was Parent Co.’s share of Sub Co.’s dividends for the year?
Dividends $
 
(c) What was Sub Co.’s total net income for the year?
 Total net income $
 
(d) What was Sub Co.’s total dividends for the year?
Total Dividends $
 
 
Exercise 17-16
Jaycie Phelps Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2013. The purchase price was $1,200,000 for 50,000 shares. Kulikowski Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2014. Kulikowski reported net income of $730,000 for 2014. The fair value of Kulikowski’s stock was $27 per share at December 31, 2014.
 
(a) Prepare the journal entries for Jaycie Phelps Inc. for 2013 and 2014, assuming that Phelps cannot exercise significant influence over Kulikowski. The securities should be classified as available-for-sale. (Credit account titles are automatically indented when 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.)
 
Date                             Account Titles and Explanation                       Debit    Credit
Dec. 31, 2013
June 30, 2014
Dec. 31, 2014
 
(b) Prepare the journal entries for Jaycie Phelps Inc. for 2013 and 2014, assuming that Phelps can exercise significant influence over Kulikowski. (Credit account titles are automatically indented when 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.)
Date Account Titles and Explanation Debit Credit
Dec. 31, 2013
June 30, 2014
Dec. 31, 2014
 
(c) At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2014? What is the total net income reported in 2014 under each of these methods?
Fair Value Method Equity Method
Investment amount
Dividend revenue
 
Investment income (income statement)

• WE OFFER THE BEST CUSTOM PAPER WRITING SERVICES. WE HAVE DONE THIS QUESTION BEFORE, WE CAN ALSO DO IT FOR YOU.
• Assignment status: Already Solved By Our Experts
• (USA, AUS, UK & CA PhD. Writers)
• CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS

QUALITY: 100% ORIGINAL PAPER – NO PLAGIARISM – CUSTOM PAPER

Why Choose Us?

How It Works

• Click on the “Place Your Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
• Fill in your paper’s requirements in the “PAPER DETAILS” section.
• Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
• Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
• From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.

About AcademicWritersBay.com

AcademicWritersBay.com is an easy-to-use and reliable service that is ready to assist you with your papers 24/7/ 365days a year. 99% of our customers are happy with their papers. Our team is efficient and will always tackle your essay needs comprehensively assuring you of excellent results. Feel free to ask them anything concerning your essay demands or Order.

AcademicWritersBay.com is a private company that offers academic support and assistance to students at all levels. Our mission is to provide proficient and high quality academic services to our highly esteemed clients. AcademicWritersBay.com is equipped with competent and proficient writers to tackle all types of your academic needs, and provide you with excellent results. Most of our writers are holders of master’s degrees or PhDs, which is an surety of excellent results to our clients. We provide assistance to students all over the world.
We provide high quality term papers, research papers, essays, proposals, theses and many others. At AcademicWritersBay.com, you can be sure of excellent grades in your assignments and final exams.