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ACC557 Week 7 E11-7 E11-13 E11-17 P11-3A

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ACC557 Week 7 E11-7 E11-13 E11-17 P11-3A

E11-7 Fallow Co. had the following transactions during the current period.
Mar. 2 Issued 5,000 shares of $1 par value common stock to attorneys in payment of a bill for $38,000 for services provided in helping the company to incorporate.
June 12 Issued 60,000 shares of $1 par value common stock for cash of $475,000.
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 $18,000.

Journalize the transactions

E11-13 On January 1, Chevon Corporation had 98,000 shares of no-par common stock
issued and outstanding. The stock has a stated value of $4 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?

E11-17 On January 1, 2014, Richard Corporation had retained earnings of $550,000. During the year, Richard had the following selected transactions.

1. Declared cash dividends $96,000.
2. Corrected overstatement of 2013 net income because of depreciation error $40,000.
3. Earned net income $350,000.
4. Declared stock dividends $80,000.

Prepare a retained earnings statement for the year.

P11-3A The stockholders’ equity accounts of Terrell Corporation on January 1, 2014, were as follows.
Preferred Stock (9%, $50 par, cumulative, 10,000 shares authorized) $ 400,000
Common Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000
Paid-in Capital in Excess of Par—Preferred Stock 100,000
Paid-in Capital in Excess of Stated Value—Common Stock 1,450,000
Retained Earnings 1,816,000
Treasury Stock (20,000 common shares) 50,000

During 2014, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb. 1 Issued 25,000 shares of common stock for $120,000.
Apr. 14 Sold 9,000 shares of treasury stock—common for $46,000.
Sept. 3 Issued 7,000 shares of common stock for a patent valued at $42,000.
Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $6,000.
Dec. 31 Determined that net income for the year was $452,000.
No dividends were declared during the year.

A. Journalize the transactions and the closing entry for net income
B. Enter the beginning balances in the accounts, and post the journal entries to the stockholders’ equity accounts. (Use J5 for the posting reference
C. Prepare a stockholders’ equity section at December 31, 2014

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