Intermediate 0607. | Accounting homework help

Problem #1 – Lump sum issuance of stock. Parker Corporation has issued 4,000 shares of common stock and 800 shares of preferred stock for a lump sum of $148,000 cash. Instructions (a) Give the entry for the issuance assuming the par value of the common
stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock.) (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 $24 per share. Problem #2 – Treasury stock. Agler Corporation’s balance sheet reported the following: Capital stock outstanding, 5,000 shares, par $30 per share
$150,000 Paid-in capital in excess of par 80,000 Retained earnings 100,000 The following transactions occurred this year: (a) Purchased 400 shares of capital stock to be held as treasury stock, paying $50 per share. (b) Sold 150 of the shares of treasury stock
at $70 per share. (c) Sold the remaining shares of treasury stock at $55 per share. Instructions A. Prepare the journal entry for these transactions under the cost method of accounting for treasury stock. B. Prepare the Stockholder’s Equity Section of the
Balance Sheet. Problem #3 – Basic and diluted EPS. Assume that the following data relative to Kane Company for 2015 is available: Net Income $5,600,000 Transactions in Common Shares Change Cumulative Jan. 1, 2015, Beginning number 700,000 Mar. 1, 2015, Purchase
of treasury shares (60,000) 640,000 June 1, 2015, Stock split 2-1 640,000 1,280,000 Nov. 1, 2015, Issuance of shares 240,000 1,520,000 8% Cumulative Convertible Preferred Stock Sold at par, convertible into 200,000 shares of common (adjusted for split). $1,000,000
Instructions (a) Compute the basic earnings per share for 2015. (Round to the nearest penny.) (b) Compute the diluted earnings per share for 2015. (Round to the nearest penny.) Problem #4 – Trading equity securities. Korman Company has the following securities
in its portfolio of trading securities on December 31, 2014: Cost Fair Value 5,000 shares of Thomas Corp., Common $151,000 $139,000 10,000 shares of Gant, Common 182,000 190,000 $333,000 $329,000 All of the securities had been purchased in 2014. In 2015, Korman
completed the following securities transactions: March 1 Sold 5,000 shares of Thomas Corp., Common @ $31 April 1 Bought 1,200 shares of Werth Stores, Common @ $45 The Korman Company portfolio of trading securities appeared as follows on December 31, 2015:
Cost Fair Value 10,000 shares of Gant, Common $182,000 $195,500 1,200 shares of Werth Stores, Common 54,000 51,500 $236,000 $247,000 Instructions Prepare the general journal entries for Korman Company for: (a) the 2014 adjusting entry. (b) the sale of the
Thomas Corp. stock. (c) the purchase of the Werth Stores’ stock. (d) the 2015 adjusting entry. Problem #5 – Interperiod tax allocation with change in enacted tax rates. Murphy Company purchased equipment for $300,000 on January 2, 2014, its first day of operations.
For book purposes, the equipment will be depreciated using the straight-line method over three years with no salvage value. Pretax financial income and taxable income are as follows: 2014 2015 2016 Pretax financial income $194,000 $260,000 $330,000 Taxable
income 224,000 260,000 300,000 The temporary difference between pretax financial income and taxable income is due to the use of accelerated depreciation for tax purposes. Instructions (a) Prepare the journal entries to record income taxes for all three years
(expense, deferrals, and liabilities) assuming that the enacted tax rate applicable to all three years is 30%.