Hi the question as it is from book of accounting page 629 ( financial accounting
ID: 2597818 • Letter: H
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Hi the question as it is from book of accounting page 629 ( financial accounting tools for business descion making kimmel) samev problem 11-3A
Problem 11-3A
Record the above transactions, including any entries required to close dividends and net income. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round average cost per share to 2 decimal palces, e.g. 2.25 and final answers to 0 decimal places.)
Date
Account Titles and Explanation
Debit
Credit
June 12
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
(To close net income/(loss).)
Dec. 31
(To close dividends.)
(c)Prepare the statement of changes in equity for the year. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Hi the question as it is from book of accounting page 629 ( financial accounting tools for business descion making kimmel) samev problem 11-3A
Problem 11-3A
Uli Corporation, a publicly traded company, is authorized to issue 193,000 $4 cumulative preferred shares and an unlimited number of common shares. On January 1, 2018, the general ledger contained the following shareholders’ equity accounts: Preferred shares (7,300 shares issued) $408,800 Common shares (67,200 shares issued) 1,075,200 Contributed surplus 25,500 Retained earnings 819,000 Accumulated other comprehensive income 10,200The following equity transactions occurred in 2018: Feb. 6 Issued 10,400 preferred shares for $624,000. Apr. 6 Issued 19,200 common shares for $566,400. 27 Reacquired and retired 2,700 common shares at $18 per share. May 29 Declared a semi-annual cash dividend to the preferred shareholders of record at June 12, payable July 1. Aug. 22 Issued 9,600 common shares in exchange for a building. At the time of the exchange, the building was valued at $162,400 and the common shares at $147,000. Dec. 14 The board of directors decided there were insufficient funds to declare the semi-annual dividend to the preferred shareholders. 31 Net income for the year was $546,000. (a)
Record the above transactions, including any entries required to close dividends and net income. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round average cost per share to 2 decimal palces, e.g. 2.25 and final answers to 0 decimal places.)
Date
Account Titles and Explanation
Debit
Credit
June 12
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
(To close net income/(loss).)
Dec. 31
(To close dividends.)
Explanation / Answer
(a) Date Account titles Debit Credit Feb. 6 Cash 624000 Preferred shares (10400*56) 582400 Contributed surplus 41600 (Issue of preferred stock) Apr. 6 Cash 566400 Common stock (19200*16) 307200 Contributed surplus 259200 (Issue of common stock) Apr. 27 Common stock (2700*15) 40500 Contributed surplus 8100 Cash (2700*18) 48600 (Reacquired and retired common shares ) May. 29 Preferred dividend (17700*4*1/2) 35400 Preferred dividend payable 35400 (Preferred dividend declared) July 1. Preferred dividend payable 35400 Cash 35400 (Preferred dividend paid) Aug. 22 Building 162400 Common stock (9600*16) 153600 Contributed surplus 8800 (Issued 9,000 common shares in exchange for a building) Dec. 14 No entry Dec. 31 Retained earnings 35400 Preferred dividend 35400 (Closure of dividend) Dec. 31 Income summary 546000 Retained earnings 546000 (Closure of net income) Note: Par value of preferred shares=408800/7300=$ 56 per share Par value of common shares=1075200/67200=$ 16 per share (b) Preferred shares Date Account titles Debit Date Account titles Credit Jan.1 Balance 408800 Dec 31. Balance 991200 Feb 6. Cash 582400 991200 991200 Common shares Date Account titles Debit Date Account titles Credit Apr. 27 Cash 40500 Jan.1 Balance 1075200 Dec. 31 Balance 1495500 Apr. 6 Cash 307200 Aug. 22 Building 153600 1536000 1536000 Contributed surplus Date Account titles Debit Date Account titles Credit Apr. 27 Cash 8100 Jan.1 Balance 25500 Feb 6. Cash 41600 Dec. 31 Balance 327000 Apr. 6 Cash 259200 Aug. 22 Building 8800 335100 335100 Retained earnings Date Account titles Debit Date Account titles Credit Dec. 31 Preferred dividend 35400 Jan.1 Balance 819000 Dec. 31 Income summary 546000 Dec. 31 Balance 1329600 1365000 1365000 c) Statement of changes in equity Common stock Preferred common stock Contributed surplus Retained earnings Accumulated other comprehensive income Balance at January 1 1075200 408800 25500 819000 10200 Changes in equity for the year: Issue of preferred stock 582400 41600 Issue of common stock for cash 307200 259200 Reacquired and retired common shares -40500 -8100 Dividend paid -35400 Issue of common stock in exchange of building 153600 8800 Income for the year 546000 Balance at December 31 1495500 991200 327000 1329600 10200 d) Shareholder's equity section Preferred shares $991,200 Common shares 1,495,500 Contributed surplus 327,000 Retained earnings 1,329,600 Accumulated other comprehensive income 10,200 $4,153,500
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