Blondell Corporation has issued 2,500 shares of common stock and 500 shares of preferred stock for a lump sum of $95,000 cash.
(a) Give the entry for the issuance assuming the par value of the common stock was $8 and the fair value $28, and the par value of the preferred stock was $35 and the fair value $65. (Each valuation is on a per share basis and there are ready markets for each stock.)
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(b) Give the entry for the issuance assuming the same facts as (a) above except the preferred stock has no ready market and the common stock has a fair value of $30 per share.
Presented below is information related to Worldwide Int Company:
The company is granted a charter that authorizes the issuance of 50,000 shares of $110 par value preferred stock and 100,000 shares of $15 common stock.
2. Worldwide Int. issued 2,000 shares of common stock to the founders of the corporation for land valued by the board of directors at $200,000. At that time, the common stock was selling at $60 per share.
3. 10,000 shares of preferred stock are sold for cash at $110 per share.
4. The company issues 300 shares of common stock to its attorneys for costs associated with starting the company. At that time, the common stock was selling at $60 per share.
5. 10,000 shares of common stock are sold for cash at $65 per share.
6. Exchange 5,000 shares for a Building that had an assessed value of $460,000. Worldwide Corporation stock is actively traded and had a market price of $60.
7. Issued 8,000 shares of common stock in exchange for a patent with a fair market value of $200,000.
Prepare the general journal entries necessary to record these transactions.
Champions Corporation has the following capital structure at the beginning of the year:
5% Preferred stock, $50 par value, 20,000 shares authorized,
6,000 shares issued and outstanding$ 300,000
Common stock, $10 par value, 60,000 shares authorized,
40,000 shares issued and outstanding400,000
Paid-in capital in excess of par 110,000
Total paid-in capital810,000
Retained earnings 940,000
Total stockholders’ equity$1,750,000
(a) Record the following transactions which occurred consecutively (show all calculations).
1.A total cash dividend of $100,000 was declared and payable to stockholders of record.
Record dividends payable on common and preferred stock in separate accounts.
2.A 10% common stock dividend was declared. The average fair value of the common
stock is $25 a share.
3. Champions Corporation owned 30,000 shares of Celtics Corporation. These shares were
purchased in 2019 for $900,000. On June 16, 2022, champion declared a property dividend out of Celtics Investments. On that date, the market price of Celtics stocks was $20 per share.
4. Purchased 500 shares of capital stock to be held as treasury stock, paying $40 per share.
(b) Construct the stockholders’ equity section incorporating all the above information.
Champions Inc., has $800,000 of 9% preferred stock and $1,200,000 of common stock outstanding, each having a par value of $10 per share. No dividends have been paid or declared during 2019 and 2020. As of December 31, 2021, it is desired to distribute $200,000 in dividends.
How much will the preferred and common stockholders receive in 2021 under each of the following assumptions:
(a) The preferred is noncumulative.
(b) The preferred is cumulative.