Question

1. BonitaCorp. issues 2800 shares of $10 par value common stock at $15 per share. When the transaction is recorded, credits are made to

Common Stock $28000 and Retained Earnings $14000.

Common Stock $28000 and Paid-in Capital in Excess of Par $14000.

2. VaughnCompany is authorized to issue 9000 shares of 7%, $100 par value preferred stock and 532000 shares of no-par common stock with a stated value of $1 per share. If Vaughn issues 4500 shares of preferred stock for land with an asking price of $588000 and a market value of $544000, which of the following would be the journal entry for Vaughn to record?

Land 588000    Preferred Stock 450000    Paid-in Capital in Excess of Par-Preferred 138000

Land 544000    Preferred Stock 450000    Paid-in Capital in Excess of Par-Preferred 94000

3. WaterwayCorporation’s December 31, 2021 balance sheet showed the following:

9% preferred stock, $20 par value, cumulative, 11000 shares
authorized; 8500 shares issued	$ 170000
Common stock, $10 par value, 900000 shares authorized;
875000 shares issued, 860000 shares outstanding	8750000
Paid-in capital in excess of par―preferred stock	29100
Paid-in capital in excess of par―common stock	13490000
Retained earnings	3760000
Treasury stock (15100 shares)	322000

Waterwaydeclared and paid a $58400 cash dividend on December 15, 2021. If the company’s dividends in arrears prior to that date were $10400, Waterway’s common stockholders received

$0.

$32700.

4. Sheffield Corporation’s December 31, 2020 balance sheet showed the following:

7% preferred stock, $20 par value, cumulative, 11000 shares
authorized; 8000 shares issued	$ 160000
Common stock, $10 par value, 970000 shares authorized;
870000 shares issued, 850000 shares outstanding	8700000
Paid-in capital in excess of par—preferred stock	33000
Paid-in capital in excess of par—common stock	11640000
Retained earnings	3740000
Treasury stock (9733 shares)	306600

Sheffield’s total stockholders’ equity was

$24017400.

$23966400.

5. The following selected amounts are available for Sunland Company.

Retained earnings (beginning)	$870
Net loss	120
Cash dividends declared	100
Stock dividends declared	90

What is its ending retained earnings balance?

$680

$560

Answer 1

1	Bonita Corp
	BonitaCorp. issues 2800 shares of $10 par value common stock at $15 per share.
	When the transaction is recorded, credits are made to
Option 2	Common Stock $28000 and Paid-in Capital in Excess of Par $14000
	Account	Debit	Credit	Calculation
	Cash	42,000		=2,800*15
	Common Stock		28,000	=2,800*10
	Paid-in Capital in Excess of Par		14,000

2	Vaughn Company
	VaughnCompany is authorized to issue 9000 shares of 7%, $100 par value preferred stock
	and 532000 shares of no-par common stock with a stated value of $1 per share.
	If Vaughn issues 4500 shares of preferred stock for land with an asking price of $588000
	and a market value of $544000, which of the following would be the journal entry for Vaughn to record?
Option 2	Account	Debit	Credit	Calculation
	Land	544,000		market value
	Preferred Stock		450,000	=4,500*100
	Paid-in Capital in Excess of Par-Preferred		94,000

3	Waterway Corporation
	9% preferred stock, $20 par value, cumulative, 11000 shares
	authorized; 8500 shares issued	170,000
	Common stock, $10 par value, 900000 shares authorized;
	875000 shares issued, 860000 shares outstanding	8,750,000
	Paid-in capital in excess of par―preferred stock	29,100
	Paid-in capital in excess of par―common stock	13,490,000
	Retained earnings	3,760,000
	Treasury stock (15100 shares)	322,000
	Waterway declared and paid a $58400 cash dividend on December 15, 2021.
	If the company’s dividends in arrears prior to that date were $10400,
Option 2	Waterway’s common stockholders received	32,700
	Workings
	Cash dividend	58,400
	Dividends in arrears	(10,400)
	Cash dividend for current year	48,000
	Preferred dividend	(15,300)	=170,000*9%
	Common dividend	32,700

4	Sheffield Corporation
	7% preferred stock, $20 par value, cumulative, 11000 shares
	authorized; 8000 shares issued	160,000
	Common stock, $10 par value, 970000 shares authorized;
	870000 shares issued, 850000 shares outstanding	8,700,000
	Paid-in capital in excess of par—preferred stock	33,000
	Paid-in capital in excess of par—common stock	11,640,000
	Retained earnings	3,740,000
	Treasury stock (9733 shares)	(306,600)
Option 2	Total stockholders’ equity	23,966,400

5	Sunland Company
	Retained earnings (beginning)	870
	Net loss	(120)
	Cash dividends declared	(100)
	Stock dividends declared	(90)
Option 2	Ending retained earnings	560