ACCT 312 Week 3 Homework (Updated)

ACCT 312 Week 3 Homework (Updated)

Exercise 18-5:

Issuance of shares; noncash consideration

During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 8 million common shares, $1 par per share, and 1 million preferred shares, $50 par per share.

Required:

Prepare the appropriate journal entries to record each transaction.

Feb. 12      Sold 2 million common shares, for $9 per share.

Feb. 13     Issued 40,000 common shares to attorneys in exchange for legal services.

Feb. 13     Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000.

Feb. 13     Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000.

Exercise 18-11

Retirement of shares

Borner Communications’ articles of incorporation authorized the issuance of 130 million common shares. The transactions described below effected changes in Borner’s outstanding shares. Prior to the transactions, Borner’s shareholders’ equity included the following:

Required:

Assuming that Borner Communications retires shares it reacquires (restores their status to that of authorized but unissued shares), record the appropriate journal entry for each of the following transactions:

1. On January 7, 2013, Borner reacquired 2 million shares at $5.00 per share.
2. On August 23, 2013, Borner reacquired 4 million shares at $3.50 per share.
3. On July 25, 2014, Borner sold 3 million common shares at $6 per share.

Exercise 18-13

Treasury stock

In 2013, Western Transport Company entered into the treasury stock transactions described below. In 2011, 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, 2013, Western Transport reacquired 10 million shares at $20 per share.
2. On September 3, 2013, Western Transport sold 1 million treasury shares at $21 per share.
3. On November 4, 2013, Western Transport sold 1 million treasury shares at $18 per share.

Exercise 18-19

Stock dividend

The shareholders’ equity of Core Technologies Company on June 30, 2012, included the following:

On April 1, 2013, the board of directors of Core Technologies declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of Core Technologies’ common stock was $30 on April 1, 2013, and $40 on June 1, 2013.

Required:

Prepare the journal entry to record the distribution of the stock dividend on the declaration date.