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ACC306 WEEK4 E18-18 E18-24 P18-5 E19-2 E19-5 E19-9 E19-24

Price: $19.99


The attached tutorials are in EXCEL FORMAT; however, if you have a template from your instructor in different formate, feel free to email me and I will help you fill it out.

E18-18, E18-24, P18-5, E19-2, E19-5, E19-9, and E19-24
E 18-18 Transactions affecting retained earnings

Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2011. At January 1, 2011, the corporation had outstanding 105 million common shares, $1 par per share.

Retained Earnings ($ in millions)
90 Beginning balance Retirement of 5 million common Shares for $22 million 2
88 Net income for the year Declaration and payment of a 0.33 per share cash dividend 33

Declaration and distribution Of a 4% stock dividend 20 123 ending balance

Required:

1. From the information provided by the account changes you should be able to recreate the
transactions that affected Brenner-Jude's retained earnings during 2011. Prepare the journal
entries that Brenner-Jude must have recorded during the year for these transactions.

2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2011.

E 18-24 Profitability ratio
Comparative balance sheets for Softech Canvas Goods for 2011 and 2010 are shown below.
Softech pays no dividends, and instead reinvests all earnings for future growth.
Comparative Balance sheets ($in 000s)
December 31
2011 2010
Assets:
Cash $ 50 $40
Accounts receivable 100 120
Short-term investment 50 40
Inventory 200 140
Property, plant, and equipment (net) 600 550
$1,000 $890
Liabilities and Shareholder’s Equity:
Current liabilities $240 $210
Bonds payable 160 160
Paid-in Capital 400 400
Retained earnings 200 120
$1,000 $890

Required:
1. Determine the return on shareholders' equity for 2011.
2. What does the ratio measure?

P 18-5 Shareholders' equity transactions; statement of shareholders' equity
Listed below are the transactions that affected the shareholders' equity of Branch-Rickie
Corporation during the period 2011–2013. At December 31, 2010, the corporation's accounts
included:
($ in 000s)
Common stock, 105 million shares at $1 par $105,000
Paid-in capital-excess of par 630,000
Retained earnings 970,000

a. November 1, 2011, the board of directors declared a cash dividend of $.80 per share on its
common shares, payable to shareholders of record November 15, to be paid December 1.

b. On March 1, 2012, the board of directors declared a property dividend consisting of corporate
bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds
had a fair value of $1.6 million, but were purchased two years previously for $1.3 million.
Because they were intended to be held to maturity, the bonds had not been previously written
up. The property dividend was payable to shareholders of record March 13, to be distributed
April 5.

c. On July 12, 2012, the corporation declared and distributed a 5% common stock dividend
(when the market value of the common stock was $21 per share). Cash was paid in lieu of
fractional shares representing 250,000 equivalent whole shares.

d. On November 1, 2012, the board of directors declared a cash dividend of $.80 per share on
its common shares, payable to shareholders of record November 15, to be paid December 1.

e. On January 15, 2013, the board of directors declared and distributed a 3-for-2 stock split
effected in the form of a 50% stock dividend when the market value of the common stock was
$22 per share.

f. On November 1, 2013, the board of directors declared a cash dividend of $.65 per share on
its common shares, payable to shareholders of record November 15, to be paid December 1.

Required:
1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these
transactions.
2. Prepare comparative statements of shareholders' equity for Branch-Rickie for the three-year
period ($ in 000s). Net income was $330 million, $395 million, and $455 million for 2011,
2012, and 2013, respectively
E 19-2 Restricted stock award plan
On January 1, 2011, VKI Corporation awarded 12 million of its $1 par common shares to key
personnel, subject to forfeiture if employment is terminated within three years. On the grant date, the shares have a market price of $2.50 per share.
Required:
1. Determine the total compensation cost pertaining to the restricted shares.
2. Prepare the appropriate journal entry to record the award of restricted shares on January 1,
2011
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2011.
4. Prepare the appropriate journal entry to record compensation expense on December 31, 2012.
5. Prepare the appropriate journal entry to record compensation expense on December 31, 2013.
6. Prepare the appropriate journal entry to record the lifting of restrictions on the shares at
December 31, 2013.

E 19-5 Stock options
American Optical Corporation provides a variety of share-based compensation plans to its
employees. Under its executive stock option plan, the company granted options on January 1,
2011, that permit executives to acquire 4 million of the company's $1 par common shares within the
next five years, but not before December 31, 2012 (the vesting date). The exercise price is the
market price of the shares on the date of grant, $14 per share. The fair value of the 4 million
options, estimated by an appropriate option pricing model, is $3 per option. No forfeitures are
anticipated. Ignore taxes.
Required:
1. Determine the total compensation cost pertaining to the options.
2. Prepare the appropriate journal entry to record the award of options on January 1, 2011.
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2011.
4. Prepare the appropriate journal entry to record compensation expense on December 31, 2012.

E 19-9 Employee share purchase plan

In order to encourage employee ownership of the company's $1 par common shares, Washington
Distribution permits any of its employees to buy shares directly from the company through payroll
deduction. There are no brokerage fees and shares can be purchased at a 15% discount. During
March, employees purchased 50,000 shares at a time when the market price of the shares on the
New York Stock Exchange was $12 per share.

Required:
Prepare the appropriate journal entry to record the March purchases of shares under the employee
share purchase plan.

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