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W5 E13-5 P13-1A E14-1 E15-5 E16-4 E17-2

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E13-5 Leone Co. had the following transactions during the current period.

Mar. 2 Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill
for $30,000 for services provided in helping the company to incorporate.

June 12 Issued 60,000 shares of $5 par value common stock for cash of $375,000.

July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.

Nov. 28 Purchased 2,000 shares of treasury stock for $80,000.

Instructions

Journalize the transactions.

P13-1A Franco Corporation was organized on January 1, 2010. It is authorized to issue 10,000
shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a
stated value of $2 per share.The following stock transactions were completed during the first year.

Jan. 10 Issued 80,000 shares of common stock for cash at $4 per share.

Mar. 1 Issued 5,000 shares of preferred stock for cash at $105 per share.

Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was
$90,000.The fair market value of the land was $85,000.

May 1 Issued 80,000 shares of common stock for cash at $4.50 per share.

Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000
for services provided in helping the company organize.

Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share.

Nov. 1 Issued 1,000 shares of preferred stock for cash at $109 per share.

Instructions

(a) Journalize the transactions.

(b) Post to the stockholders’ equity accounts. (Use J5 as the posting reference.)

(c) Prepare the paid-in capital section of stockholders’ equity at December 31, 2010


E14-1 On January 1, Molini Corporation had 95,000 shares of no-par common stock issued and
outstanding.The stock has a stated value of $5 per share. During the year, the following occurred.

Apr. 1 Issued 25,000 additional shares of common stock for $17 per share.

June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.

July 10 Paid the $1 cash dividend.

Dec. 1 Issued 2,000 additional shares of common stock for $19 per share.
15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of
record on December 31.

Instructions

(a) Prepare the entries, if any, on each of the three dividend dates.

(b) How are dividends and dividends payable reported in the financial statements prepared at
December 31?

E15-5 Jaurez Company issued $400,000 of 9%, 10-year bonds on January 1, 2010, at face value.
Interest is payable semiannually on July 1 and January 1.

Instructions

Prepare the journal entries to record the following events.

(a) The issuance of the bonds.

(b) The payment of interest on July 1, assuming no previous accrual of interest.

(c) The accrual of interest on December 31.

(d) The redemption of bonds at maturity, assuming interest for the last interest period has been
paid and recorded.

E16-4 Dossett Company had the following transactions pertaining to stock investments.
Feb. 1 Purchased 600 shares of Goetz common stock (2%) for $6,000 cash, plus brokerage
fees of $200.

July 1 Received cash dividends of $1 per share on Goetz common stock.

Sept. 1 Sold 300 shares of Goetz common stock for $4,400, less brokerage fees of $100.

Dec. 1 Received cash dividends of $1 per share on Goetz common stock.

Instructions

(a) Journalize the transactions.

(b) Explain how dividend revenue and the gain (loss) on sale should be reported in the income
statement.

E17-2 An analysis of comparative balance sheets, the current year’s income statement, and
the general ledger accounts of Gagliano Corp. uncovered the following items. Assume all items
involve cash unless there is information to the contrary.

(a) Payment of interest on notes payable.  (h) Issuance of capital stock. 
(b) Exchange of land for patent.  (i) Amortization of patent. 
(c) Sale of building at book value.  (j) Issuance of bonds for land. 
(d) Payment of dividends.  (k) Purchase of land. 
(e) Depreciation.  (l) Conversion of bonds into common stock. 
(f) Receipt of dividends on investment in stock (m) Loss on sale of land. 
(g) Receipt of interest on notes receivable.  (n) Retirement of bonds. 

Instructions

Indicate how each item should be classified in the statement of cash flows using these four major
classifications: operating activity (indirect method), investing activity, financing activity, and significant
noncash investing and financing activity.






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