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Acc 8Qs Wilco

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Question 1
Wilco Corporation has the following account balances at December 31, 2012.

Common stock, $5 par value
$526,580

Treasury stock
92,770

Retained earnings
2,340,730

Paid-in capital in excess of par
1,327,750
Prepare Wilco's December 31, 2012, stockholders' equity section.

Question 2

Woolford Inc. declared a cash dividend of $1.39 per share on its 2.34 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15. Prepare the journal entries necessary on those three dates. (If no entry is required, enter No Entry as the Description and 0 as the amount.)

Question 3
(Preferred Dividends)
The outstanding capital stock of Pennington Corporation consists of 3,000 shares of $109 par value, 6% preferred, and 5,400 shares of $53 par value common.
Assuming that the company has retained earnings of $90,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.
(a)
The preferred stock is noncumulative and nonparticipating.



(b)
The preferred stock is cumulative and nonparticipating.



(c)
The preferred stock is cumulative and participating. (Round rate of participation to 4 decimal places, e.g. 5.1234. Round final answer to 0 decimal places, e.g. 25,320.)



Question 4


(Preferred Dividends)
Martinez Company's ledger shows the following balances on December 31, 2012.

5% Preferred stock-$10 par value, outstanding 21,380 shares
$213,800

Common stock-$100 par value, outstanding 32,070 shares
3,207,000

Retained earnings
673,470
Assuming that the directors decide to declare total dividends in the amount of $284,354, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock.

(a)
The preferred stock is cumulative and fully participating.

(b)
The preferred stock is noncumulative and nonparticipating.


(c)
The preferred stock is noncumulative and is participating in distributions in excess of a 7% dividend rate on the common stock. (Note: Do not round rate of participation. Round final answers to zero decimal places, e.g. 12,310.)



Question 5

On January 1, 2012, Barwood Corporation granted 5,180 options to executives. Each option entitles the holder to purchase one share of Barwood's $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $65 per share on the date of grant. The fair value of the options at the grant date is $166,300. The period of benefit is 2 years. Prepare Barwood's journal entries for January 1, 2012, and December 31, 2012 and 2013. (If no entry is required, enter No Entry as the description and 0 as the amount.)

Question 6
2.    On April 1, purchased 7,000 shares of Belmont Co.'s common stock at $72.80 per share plus commission $4,718.(Equity Securities Entries)
Capriati Corporation made the following cash purchases of securities during 2012, which is the first year in which Arantxa invested in securities.
1.    On January 15, purchased 12,600 shares of Gonzalez Company's common stock at $46.90 per share plus commission $2,772.
3.    On September 10, purchased 9,800 shares of Thep Co.'s preferred stock at $37.10 per share plus commission $6,874.
On May 20, 2012, Capriati sold 4,200 shares of Gonzalez Company's common stock at a market price of $49.00 per share less brokerage commissions, taxes, and fees of $3,990. The year-end fair values per share were: Gonzalez $42.00, Belmont $77.00, and Thep $39.20. In addition, the chief accountant of Capriati told you that Capriati Corporation plans to hold these securities for the long term but may sell them in order to earn profits from appreciation in prices.

(a)
Prepare the journal entries to record the above three security purchases.

(b)
Prepare the journal entry for the security sale on May 20. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

(c)
Compute the unrealized gains or losses and prepare the adjusting entries for Capriati on December 31, 2012.

Unrealized gain or loss (For negative numbers use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)


Question 7
(Journal Entries for Fair Value and Equity Methods)
Presented below are two independent situations.
Prepare all necessary journal entries in 2012 for each situation.
Situation 1
Hatcher Cosmetics acquired 10% of the 206,500 shares of common stock of Ramirez Fashion at a total cost of $16 per share on March 18, 2012. On June 30, Ramirez declared and paid a $85,000 cash dividend. On December 31, Ramirez reported net income of $131,900 for the year. At December 31, the market price of Ramirez Fashion was $18 per share. The securities are classified as available-for-sale.

Situation 2
Holmes, Inc. obtained significant influence over Nadal Corporation by buying 25% of Nadal's 31,700 outstanding shares of common stock at a total cost of $11 per share on January 1, 2012. On June 15, Nadal declared and paid a cash dividend of $37,500. On December 31, Nadal reported a net income of $93,700 for the year.


Question 8
For 2010, Campbell Soup Company had pension expense of $35 million and contributed $277 million to the pension fund. Prepare Campbell Soup Company's journal entry to record pension expense and funding.

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