DeLong Corporation was organized on January 1, 2020. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 80,000 shares of common stock for cash at $4 per share. Mar. 1 Issued 5,000 shares of preferred stock for cash at $105 per share. Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000. The fair value of the land was $85,000. May 1 Issued 80,000 shares of common stock for cash at $4.50 per share. Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000 for services performed in helping the company organize. Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share. Nov. 1 Issued 1,000 shares of preferred stock for cash at $109 per share. Instructions a. Journalize the transactions. b. Post to the stockholders’ equity accounts. (Use T-accounts.) c. Prepare the paid-in capital section of stockholders’ equity at December 31, 2020.
> Norris, Madson, and Howell have income ratios of 5:3:2 and capital balances of $34,000, $31,000, and $28,000, respectively. Noncash assets are sold at a gain and allocated to the partners. After creditors are paid, $103,000 of cash is available for distr
> In continuing their discussion from Question 13, Mike says that even in the case of a capital deficiency, all cash should still be distributed on the basis of capital balances. Is Mike correct? Explain. Data from Question 13: Roger Fuller and Mike Range
> Roger Fuller and Mike Rangel are discussing the liquidation of a partnership. Roger maintains that all cash should be distributed to partners on the basis of their income ratios. Is he correct? Explain.
> How does the liquidation of a partnership differ from the dissolution of a partnership?
> Herr Corporation has 3,000 shares of 7%, $100 par value preferred stock outstanding at December 31, 2020. At December 31, 2020, the company declared a $105,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders u
> Are the financial statements of a partnership similar to those of a proprietorship? Discuss.
> Tran Corporation is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. 1 Issued 20
> Rinehart Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $255,000. It later resold 2,000 shares for $54 per share, then 2,000 more shares for $49 per share, and finally 1,000 shares for $43 per share. Inst
> The financial statements of Louis Vuitton are presented in Appendix F. The complete annual report, including the notes to its financial statements, is available at the company’s website. Instructions Use the company’s
> Meenen Corporation has the following accounts at December 31 (in euros): Share Capital— Ordinary, €10 par, 5,000 shares issued, €50,000; Share Premium—Ordinary €10,000; Retained Earnings €45,000; and Treasury Shares—Ordinary, 500 shares, €11,000. Prepare
> The stockholders’ meeting for Percival Corporation has been in progress for some time. The chief financial officer for Percival is presently reviewing the company’s financial statements and is explaining the items that
> Partners T. Greer and R. Parks are provided salary allowances of $30,000 and $25,000, respectively. They divide the remainder of the partnership income in a ratio of 3:2. If partnership net income is $40,000, how much is allocated to Greer and Parks?
> Use the stockholders’ equity section of an annual report and identify the major components. Instructions Go to the Annual Reports website, select a company of your choice, and then answer the following questions. a. What is the company’s name? b. What c
> Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon and Wal-Mart, including the notes to the financial sta
> PepsiCo, Inc.’s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola, including the notes to the financial stat
> The stockholders’ equity section for Apple Inc. is shown in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company’s website. Instructions a. What is the p
> In this textbook, you learned that in response to the Sarbanes-Oxley Act, many companies have implemented formal ethics codes. Many other organizations also have ethics codes. Instructions Obtain the ethics code from an organization that you belong to (
> In the past year, Gosser Corporation declared a 10% stock dividend, and Jenks, Inc. announced a 2-for-1 stock split. Your parents own 100 shares of each company’s $50 par value common stock. During a recent phone call, your parents ask you, as an account
> The stockholders’ equity accounts of Gonzalez, Inc., at January 1, 2020, are as follows. Preferred Stock, no par, 4,000 shares issued ……………………………………………. $400,000 Common Stock, no par, 140,000 shares issued …………………………………………… 700,000 Retained Earnings ………
> Use the stockholders’ equity section of an annual report and identify the major components. Instructions Go to the Annual Reports website, select a company of your choice, and then answer the following questions. a. What is the company’s name? b. What c
> Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon and Wal-Mart, including the notes to the financial sta
> PepsiCo’s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola, including the notes to the financial statements
> S. Pletcher and F. Holt share net income and net loss equally. (a) Which account(s) is (are) debited and credited to record the division of net income between the partners? (b) If S. Pletcher withdraws $30,000 in cash for personal use instead of salary,
> The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company’s website. Instructions Refer to Apple’s fin
> If your school has a subscription to the FASB Codification, log in and prepare responses to the following. a. How is common stock defined? b. How is preferred stock defined? c. What is the meaning of the term shares?
> A high percentage of Americans own stock in corporations. As a shareholder in a corporation, you will receive an annual report. One of the goals of this course is for you to learn how to navigate your way around an annual report. Instructions Use Apple’
> Joe Moyer, your uncle, is an inventor who has decided to incorporate. Uncle Joe knows that you are an accounting major at U.N.O. In a recent letter to you, he ends with the question, “I’m filling out a state incorporation application. Can you tell me the
> This exercise is an introduction to the Big Four accounting firms, all of which are partnerships: Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers. Instructions Select a firm that is of interest to you, go to the firm’s homepage, and t
> You are an expert in the field of forming partnerships. Ronald Hrabik and Meg Percival want to establish a partnership to start “Pasta Shop,’’ and they are going to meet with you to discuss their plans. Prior to the meeting, you will send them a memo dis
> Stephen Wadson and Mary Shively, two professionals in the finance area, have worked for Morrisen Leasing for a number of years. Morrisen Leasing is a company that leases high-tech medical equipment to hospitals. Stephen and Mary have decided that, with t
> Karen Noonan opened Clean Sweep Inc. on February 1, 2020. During February, the following transactions were completed. Feb. 1 Issued 5,000 shares of Clean Sweep common stock for $13,000. Each share has a $1.50 par. 1 Borrowed $8,000 on a 2-year, 6% note p
> Hawkeye Corporation’s balance sheet at December 31, 2019, is presented below. During 2020, the following transactions occurred. 1. On January 1, 2020, Hawkeye issued 1,200 shares of $40 par, 7% preferred stock for $49,200. 2. On Janua
> Alexandra and Kellie operate a beauty salon as partners who share profits and losses equally. The success of their business has exceeded their expectations; the salon is operating quite profitably. Kellie is anxious to maximize profits and schedules appo
> M. Elston and R. Ogle have partnership capital balances of $40,000 and $80,000, respectively. The partnership agreement indicates that net income or net loss should be shared equally. If net income for the partnership is $42,000, how should the net incom
> Molina Corporation has paid 60 consecutive quarterly cash dividends (15 years). The last 6 months, however, have been a cash drain on the company, as profit margins have been greatly narrowed by increasing competition. With a cash balance sufficient to m
> The R&D division of Piqua Chemical Corp. has just developed a chemical for sterilizing the vicious Brazilian “killer bees” which are invading Mexico and the southern United States. The president of the company is anxious to get the chemical on the market
> The partners in Crawford Company decide to liquidate the firm when the balance sheet shows the following. The partners share income and loss 5:3:2. During the process of liquidation, the following transactions were completed in the following sequence.
> At the end of its first year of operations on December 31, 2020, NBS Company’s accounts show the following. The capital balance represents each partner’s initial capital investment. Therefore, net income or net loss
> The post-closing trial balances of two proprietorships on January 1, 2020, are presented below. Sorensen and Lucas decide to form a partnership, Solu Company, with the following agreed upon valuations for noncash assets. All cash will be transferred
> The following stockholders’ equity accounts arranged alphabetically are in the ledger of Westin Corporation at December 31, 2020. Common Stock ($10 stated value) ………………………………………………………. $1,500,000 Paid-in Capital from Treasury Stock ………………………………………………………
> On January 1, 2020, Goodhue Inc. had the following stockholders’ equity balances. Common Stock (400,000 shares issued) ………………………………………. $800,000 Paid-in Capital in Excess of Par—Common Stock ……………………………. 500,000 Common Stock Dividends Distributable …………
> On January 1, 2020, Ven Corporation had the following stockholders’ equity accounts. Common Stock (no par value, 90,000 shares issued and outstanding) ………………… $1,600,000 Retained Earnings ……………………………………………………………………………………………… 500,000 During the year, th
> The post-closing trial balance of Storey Corporation at December 31, 2020, contains the following stockholders’ equity accounts. Preferred Stock (15,000 shares issued) ……………………………………………….. $ 750,000 Common Stock (250,000 shares issued) ……………………………………………
> On January 1, 2020, Geff rey Corporation had the following stockholders’ equity accounts. Common Stock ($20 par value, 60,000 shares issued and outstanding) …………… $1,200,000 Paid-in Capital in Excess of Par—Common Stock …………………………………………..……. 200,000 Ret
> Mutt and Jeff are discussing how income and losses should be divided in a partnership they plan to form. What factors should be considered in determining the division of net income or net loss?
> The following stockholders’ equity accounts arranged alphabetically are in the ledger of Galindo Corporation at December 31, 2020. Common Stock ($5 stated value) …………………………………………………………… $2,000,000 Paid-in Capital from Treasury Stock ……………………………………………………
> Peck Corporation is authorized to issue 20,000 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders’ equity balances. Preferred Stock (10,000 sh
> The stockholders’ equity accounts of Castle Corporation on January 1, 2020, were as follows. Preferred Stock (8%, $50 par, 10,000 shares authorized) ………………………………. $ 400,000 Common Stock ($1 stated value, 2,000,000 shares authorized) ……………………… 1,000,000
> Fechter Corporation had the following stockholders’ equity accounts on January 1, 2020: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of Par— Common Stock $200,000, and Retained Earnings $100,000. In 2020, the company had the following treasu
> Irwin Corporation has been authorized to issue 20,000 shares of $100 par value, 10%, preferred stock and 1,000,000 shares of no-par common stock. The corporation assigned a $2.50 stated value to the common stock. At December 31, 2020, the ledger containe
> On December 31, the capital balances and income ratios in TEP Company are as follows. Instructions a. Journalize the withdrawal of Posada under each of the following assumptions. 1. Each of the continuing partners agrees to pay $18,000 in cash from per
> At April 30, partners’ capital balances in PDL Company are G. Donley $52,000, C. Lamar $48,000, and J. Pinkston $18,000. The income sharing ratios are 5:4:1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a part
> McGill and Smyth have capital balances on January 1 of $50,000 and $40,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $22,000 for McGill and $13,000 for Smyth, (2) interest at 10% on beginning capital bala
> Suzy Vopat has owned and operated a proprietorship for several years. On January 1, she decides to terminate this business and become a partner in the fi rm of Vopat and Sigma. Vopat’s investment in the partnership consists of $12,000 in cash, and the fo
> W. Jenson, N. Emch, and W. Gilligan have a partnership called Outlaws. A dispute has arisen among the partners. Jenson has invested twice as much in assets as the other two partners, and he believes net income and net losses should be shared in accordanc
> K. Decker, S. Rosen, and E. Toso are forming a partnership. Decker is transferring $50,000 of personal cash to the partnership. Rosen owns land worth $15,000 and a small building worth $80,000, which she transfers to the partnership. Toso transfers to th
> Mark Rensing has prepared the following list of statements about partnerships. 1. A partnership is an association of three or more persons to carry on as co-owners of a business for profit. 2. The legal requirements for forming a partnership can be quite
> During 2020, Roblez Corporation had the following transactions and events. 1. Declared a cash dividend. 2. Issued par value common stock for cash at par value. 3. Completed a 2-for-1 stock split in which $10 par value stock was changed to $5 par value st
> On October 1, Little Bobby Corporation’s stockholders’ equity is as follows. Common stock, $5 par value …………………………………………….. $400,000 Paid-in capital in excess of par—common stock …………………….. 25,000 Retained earnings ……………………………………………………………… 155,000 Total
> On October 31, the stockholders’ equity section of Heins Company consists of common stock $500,000 and retained earnings $900,000. Heins is considering the following two courses of action: (1) declaring a 5% stock dividend on the 50,000, $10 par value sh
> On January 1, 2020, Frontier Corporation had $1,000,000 of common stock outstanding that was issued at par. It also had retained earnings of $750,000. The company issued 40,000 shares of common stock at par on July 1 and earned net income of $400,000 for
> Knudsen Corporation was organized on January 1, 2019. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash di
> Newland and Palermo form a partnership. Newland contributes land with a book value of $50,000 and a fair value of $60,000. Newland also contributes equipment with a book value of $52,000 and a fair value of $57,000. The partnership assumes a $20,000 mort
> At December 31, Gorden Corporation has total stockholders’ equity of $3,200,000. Included in this total are preferred stock $500,000 and paid-in capital in excess of par—preferred stock $50,000. There are 10,000 shares of $50 par value, 8% cumulative pre
> A recent stockholders’ equity section of Aluminum Company of America (Alcoa) showed the following (in alphabetical order): additional paid-in capital $6,101, common stock $925, preferred stock $56, retained earnings $7,428, and treasury stock $2,828. (Al
> At December 31, 2020, Millwood Corporation has 2,000 shares of $100 par value, 8%, preferred stock outstanding and 100,000 shares of $10 par value common stock issued. Millwood’s net income for the year is $241,000. Instructions Compute the earnings per
> This financial information is available for Klinger Corporation. The weighted-average number of shares of common stock outstanding was 180,000 for 2019 and 150,000 for 2020. Instructions Calculate earnings per share and return on common stockholders&a
> The following financial information is available for Plummer Corporation. The weighted-average number of shares of common stock outstanding was 80,000 for 2019 and 100,000 for 2020. Instructions Calculate earnings per share and return on common stockh
> Ringgold Corporation has outstanding at December 31, 2020, 50,000 shares of $20 par value, cumulative, 6% preferred stock and 200,000 shares of $5 par value common stock. All shares were outstanding the entire year. During 2020, Ringgold earned total rev
> In 2020, Pennington Corporation had net sales of $600,000 and cost of goods sold of $360,000. Operating expenses were $153,000, and interest expense was $7,500. The corporation’s tax rate is 30%. The corporation declared preferred dividends of $15,000 in
> The following information is available for Norman Corporation for the year ended December 31, 2020: sales revenue $700,000, other revenues and gains $92,000, operating expenses $110,000, cost of goods sold $465,000, other expenses and losses $32,000, and
> Suppose the following financial information is available for Walgreen Company. Instructions Calculate the payout ratio and return on common stockholders’ equity for 2020 and 2019. Comment on your findings. (in millions) 2020 2019
> The following financial information is available for Flintlock Corporation. Instructions Calculate the payout ratio and return on common stockholders’ equity for 2020 and 2019. Comment on your findings. (in millions) 2020 2019 Ave
> The financial statements of Louis Vuitton are presented in Appendix F. The complete annual report, including the notes to its financial statements, is available at the company’s website. Instructions Use the company’s annual report to answer the followi
> On January 1, Guillen Corporation had 95,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred. Apr. 1 Issued 25,000 additional shares of common stock for $17 per s
> As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients. 1. LR Corporation is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land
> Quay Co. had the following transactions during the current period. Mar. 2 Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $30,000 for services performed in helping the company to incorporate. June 12 Issued 60,000 s
> Osage Corporation issued 2,000 shares of stock. Instructions Prepare the entry for the issuance under the following assumptions. a. The stock had a par value of $5 per share and was issued for a total of $52,000. b. The stock had a stated value of $5 pe
> During its first year of operations, Foyle Corporation had the following transactions pertaining to its common stock. Jan. 10 Issued 70,000 shares for cash at $5 per share. July 1 Issued 40,000 shares for cash at $7 per share. Instructions a. Journalize
> Andrea (see E13.1) has studied the information you gave her in that exercise and has come to you with more statements about corporations. 1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a
> The following accounts appear in the ledger of Horner Inc. after the books are closed at December 31, 2020. Common Stock, no par, $1 stated value, 400,000 shares authorized; …………………………………. 300,000 shares issued …………………………………………………………………………….……….. $ 300
> The ledger of Rolling Hills Corporation contains the following accounts: Common Stock, Preferred Stock, Treasury Stock, Paid-in Capital in Excess of Par—Preferred Stock, Paid-in Capital in Excess of Stated Value—Common
> The stockholders’ equity section of Aluminum Company of America (Alcoa) showed the following (in alphabetical order): additional paid-in capital $6,101, common stock $925, preferred stock $56, retained earnings $7,428, and treasury stock 2,828. All dolla
> Why might a company choose to use a limited partnership?
> The stockholders’ equity section of Haley Corporation at December 31 is as follows. Instructions From a review of the stockholders’ equity section, as chief accountant, write a memo to the president of the company an
> The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Eudaley Corporation at December 31, 2020. Common Stock ($5 stated value) …………………………………………..…………… $1,500,000 Paid-in Capital in Excess of Par—Preferred Stock ……………
> Gilliam Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review his textbooks on the topic of corporation accounting. During the fir
> Andrea has prepared the following list of statements about corporations. 1. A corporation is an entity separate and distinct from its owners. 2. As a legal entity, a corporation has most of the rights and privileges of a person. 3. Most of the largest U.
> Foss, Albertson, and Espinosa are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $100,000, $60,000, and $40,000, respectively. Instructions a. Assume Garrett joins the partnership by investing $88,000 f
> N. Essex, C. Gilmore, and C. Heganbart have capital balances of $50,000, $40,000, and $30,000, respectively. Their income ratios are 4:4:2. Heganbart withdraws from the partnership under each of the following independent conditions. 1. Essex and Gilmore
> S. Pagan and T. Tabor share income on a 6:4 basis. They have capital balances of $100,000 and $60,000, respectively, when W. Wolford is admitted to the partnership. Instructions Prepare the journal entry to record the admission of W. Wolford under each
> K. Kolmer, C. Eidman, and C. Ryno share income on a 5:3:2 basis. They have capital balances of $34,000, $26,000, and $21,000, respectively, when Don Jernigan is admitted to the partnership. Instructions Prepare the journal entry to record the admission
> Prior to the distribution of cash to the partners, the accounts in the VUP Company are Cash $24,000; Vogel, Capital (Cr.) $17,000; Utech, Capital (Cr.) $15,000; and Pena, Capital (Dr.) $8,000. The income ratios are 5:3:2, respectively. VUP Company decide
> Parsons Company wishes to liquidate the firm by distributing the company’s cash to the three partners. Prior to the distribution of cash, the company’s balances are Cash $73,000; Oakley, Capital (Cr.) $47,000; Quaney, Capital (Dr.) $14,000; and Ellis, Ca
> The characteristics of a partnership include the following: (a) association of individuals, (b) limited life, and (c) co-ownership of property. Explain each of these terms.
> The table shows (lifetime) peptic ulcer rates (per 100 population) for various family incomes as reported by the National Health Interview Survey. a. Make a scatter plot of these data and decide whether a linear model is appropriate. b. Find and graph
> For each scatter plot, decide what type of function you might choose as a model for the data. Explain your choices. (а) у4 (b) у
> For each scatter plot, decide what type of function you might choose as a model for the data. Explain your choices. (а) yA (b) y4
> The monthly cost of driving a car depends on the number of miles driven. Lynn found that in May it cost her $380 to drive 480 mi and in June it cost her $460 to drive 800 mi. a. Express the monthly cost C as a function of the distance driven d, assuming
> At the surface of the ocean, the water pressure is the same as the air pressure above the water, 15 lb/in2. Below the surface, the water pressure increases by 4.34 lb/in2 for every 10 ft of descent. a. Express the water pressure as a function of the dep
