AC 302 CHAPTER 15 QUESTIONS ANS PROBLEMS
Name Date
Instructor Course
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E15-1 (Recording the Issuances of Common Stock) During its first year of operations, Sitwell Corporation had the following transactions pertaining to its common stock.
01/10/12 Issued 80,000 shares for cash at $6.00 per share.
03/01/12 Issued 5,000 shares to attorneys in payment of a bill for $35,000
for services rendered in helping the company to incorporate.
07/01/12 Issued 30,000 shares for cash at $8.00 per share.
09/01/12 Issued 60,000 shares for cash at $10.00 per share.
Instructions:
(a) Prepare the journal entries for these transactions, assuming that the common stock has a par
value of $3.00 per share.
01/10/12 Account Title Amount
Account Title Amount
Account Title Amount
03/01/12 Account Title Amount
Account Title Amount
Account Title Amount
07/01/12 Account Title Amount
Account Title Amount
Account Title Amount
09/01/12 Account Title Amount
Account Title Amount
Account Title Amount
(b) Prepare the journal entries for these transactions, assuming that the common stock is no par
with a stated value of $2.00 per share.
01/10/12 Account Title Amount
Account Title Amount
Account Title Amount
03/01/12 Account Title Amount
Account Title Amount
Account Title Amount
07/01/12 Account Title Amount
Account Title Amount
Account Title Amount
09/01/12 Account Title Amount
Account Title Amount
Account Title Amount
Name: Date:
Instructor: Course:
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
E15-15 (Dividend Entries) The following data were taken from the balance sheet accounts of Wickham Corporation on December 31, 2012.
Current assets $540,000
Investments $624,000
Common stock, (par value $10) $600,000
Paid-in capital in excess of par $150,000
Retained earnings $840,000
Instructions:
Prepare the required journal entries for the following unrelated items:
(a) A 5% stock dividend is declared and distributed at a time when the market
value of the shares is $39 per share.
Account Title Formula
Account Title Formula
Account Title Formula
Account Title Amount
Account Title Amount
(b) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split
Text entry as appropriate.
(c) A dividend is declared January 5, 2013, and paid January 25, 2013, in bonds held as an investment.
The bonds have a book value of $90,000 and a fair value of $125,000
Jan 05, 13 Account Title Amount
Account Title Amount
Jan 05, 13 Account Title Amount
Account Title Amount
Jan 25, 13 Account Title Amount
Account Title Amount
Name: Date:
Instructor: Course:
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P15-1 (Equity Transactions and Statement Preparation) On January 5, 2012, Phelps Corporation
received a charter granting the right to issue 5,000 shares of $100.00 par value,
8% cumulative and nonparticipating preferred stock, and 50,000 shares of
$10.00 par value common stock. It then completed these transactions.
Jan 11 Issued 20,000 shares of common stock at $16 per share.
Feb 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets:
Machinery with a fair market value of $50,000
A factory building with a fair market value of $110,000
and, land with an appraised value of $270,000
Jul 29 Purchased 1,800 shares of common stock at $19 per share.
(Use the cost method.)
Aug 10 Sold the 1,800 treasury shares at $14 per share.
Dec 31 Declared a $0.25 per share cash dividend on the common stock and
declared the preferred dividend.
Dec 31 Closed the Income Summary account. There was a $175,700 net income.
Instructions:
(a) Record the journal entries for the transactions listed above.
Jan 11, 12 Account Title Amount
Account Title Amount
Account Title Amount
Feb 1, 12 Account Title Amount
Account Title Amount
Account Title Amount
Account Title Amount
Account Title Amount
Jul 29, 12 Account Title 34200 Amount
Account Title Amount
Aug 10, 12 Account Title 25,200* Amount
Retained Earnings Amount
Account Title Amount
*(The debit is made to Retained Earnings because no Paid-in Capital *from Treasury Stock exists.)
Dec 31, 12 Account Title 9,000* Amount
Account Title Amount
Dec 31, 12 Account Title Amount
Account Title Amount
"(b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of
December 31, 2012."
PHELPS CORPORATION
Statement of Stockholders' Equity
December 31, 2012
Capital Stock
Enter text here. Amount
Enter text here. Amount
Total capital stock Formula
Additional Paid-in Capital
Text Title Amount
Text Title Amount Formula
Text Title Formula
Text Title Amount
Total stockholders’ equity Formula
Name: Date:
Instructor: Course:
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Primer on Using Excel in Accounting by Rex A Schildhouse
P15-5 (Treasury Stockâ€â€Cost Method) Before Gordon Corporation engages in the treasury stock transactions listed below, its general ledger reflects, among others, the following account balances
(par value of its stock is $30.00 per share).
Paid-in Capital in Excess of Par Common Stock Retained Earnings
$99,000 $270,000 $80,000
Instructions:
Record the treasury stock transactions (given below) under the cost method of handling treasury stock; use the FIFO method for purchase-sale purposes.
(a) Bought 380 shares of treasury stock at $40 per share.
Account Title Amount
Account Title Amount
(b) Bought 300 shares of treasury stock at $45 per share.
Account Title Amount
Account Title Amount
(c) Sold 350 shares of treasury stock at $42 per share.
Account Title Amount
Account Title Amount
Account Title Amount
(d) Sold 110 shares of treasury stock at $38 per share.
Account Title Amount
Account Title Amount
Account Title Amount
First shares purchased Amount
Second shares purchased Amount
Cost of treasury shares sold using FIFO = Formula
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