Final Exam - Part 2 (COMPUTATIONAL)

Question 1

COMP 1: Common Stock Issued

A Company issues 1,000 shares with a stated value of $5 for $15 per share.

Record the JE

Answer 1

Dr. Cash (1,000 x $15) 15,000
Cr. Common Stock (1,000 x $5) 5,000
Cr. APIC 10,000

Question 2

COMP 2: Purchase of Treasury Stock

Pacific Company acquires 10,000 shares of its $5 par value common stock for $11.

Record the JE

Answer 2

Dr. Treasury Stock (10,000 x $11) 110,000
Cr. Cash 110,000

Question 3

COMP 3: Cash Dividend

Roadway Freight Corp. declares a cash dividend on June 10th of $0.50 a share on its 1.8 million shares payable on July 16th to stockholders of record on June 24th.

Prepare the JEs for the Date of Declaration, the Date of Record, and the Date of Payment

Answer 3

1. DATE OF DECLARATION:
   Dr. Retained Earnings 900,000
   Cr. Dividends Payable 900,000
2. DATE OF RECORD:
   No Entry
3. DATE OF PAYMENT:
   Dr. Dividends Payable 900,000
   Cr. Cash 900,000

Question 4

COMP 4: Vine Corporation has 1,000 shares of $100 par value common stock.

Prepare the JE if Vine declares a 10% stock dividend when the FV of the stock is $130 per share

Answer 4

Dr. Retained Earnings ((1,000 x .1) x $130) 13,000
Cr. Common Stock ((1,000 x .1) x $100) 10,000
Cr. APIC 3,000