The stockholders' equity of Lakeside Occupational Therapy, Inc. on December 31, 2017, follows:

$$\begin{array}{c} \textbf{Stockholders' Equity}\\ \end{array}$$

$$\begin{array}{lrr} \text{Paid-In Capital:}\\ \hspace{10pt}\text{Common Stock-\$1 Par Value; 1,200 shares}\\ \hspace{20pt}\text{authorized, 400 shares issued and outstanding}\hspace{10pt}&\text{\$\hspace{23pt}400}\\ \hspace{10pt}\text{Paid-In Capital in Excess of Par-Common}&\underline{\text{\hspace{20pt}1,600}}\\ \hspace{10pt}\text{Total Paid-In Capital}&\text{\$\hspace{15pt}2,000}\\ \text{Retained Earnings}&\underline{\text{\hspace{10pt}120,000}}\\ \text{Total Stockholders' Equity}&\text{\underline{\underline{\$\hspace{5pt}122,000}}}\\ \end{array}$$

On April 30, 2018, the market price of Lakeside's common stock was $16 per share and the company declared a 13% stock dividend. The stock was distributed on May 15.

Requirements

1. Journalize the declaration and distribution of the stock dividend.
2. Prepare the stockholders' equity section of the balance sheet as of May 31, 2018. Assume Retained Earnings are$120,000 on April 30, 2018, before the stock dividend, and the only change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends account.

The following elements of stockholders' equity are from the balance sheet of Sneed Marketing Corp. at December 31, 2017:

$$\begin{array}{c} \textbf{Stockholders' Equity}\\ \end{array}$$

$$\begin{array}{lrr} \text{Paid-In Capital:}\\ \hspace{10pt}\text{Preferred Stock-4\\\%, \$2 Par Value; 80,000 shares}\\ \hspace{20pt}\text{authorized, 55,000 shares issued and outstanding}\hspace{10pt}&\text{\$\hspace{10pt}110,000}\\ \hspace{10pt}\text{Common Stock-\$0.10 Par Value; 8,750,000 shares}\\ \hspace{20pt}\text{authorized, 8,000,000 shares issued and outstanding}\hspace{10pt}&\text{800,000}\\ \end{array}$$

Sneed paid no preferred dividends in 2017.

Requirements

1. Compute the dividends to the preferred and common shareholders for 2018 if total dividends are $185,000 and assuming the preferred stock is noncumulative. Assume no changes in preferred and common stock in 2018.
2. Record the journal entries for 2018 assuming that Sneed Marketing Corp. declared the dividends on July 1 for stockholders of record on July 15. Sneed paid the dividends on July 31.

The charter for ASAP-TV, Inc. authorizes the company to issue 100,000 shares of $5, no-par preferred stock and 500,000 shares of common stock with$1 par value. During its start-up phase, ASAP-TV completed the following transactions:

• Sep. 6 - Issued 550 shares of common stock to the promoters who organized the corporation, receiving cash of $16,500.
•       12 - Issued 400 shares of preferred stock for cash of$23,000.
•       14 - Issued 1,500 shares of common stock in exchange for land with a market value of $17,000.

Requirements

1. Record the transactions in the general journal
2. Prepare the stockholders' equity section of the ASAP-TV balance sheet at September 30, 2018, assuming ASAP-TV, Inc. had net income of$38,000 for the month.

Stock transactions for Careful Driving School, Inc. follow:

• Mar. 4 - Issued 27,000 shares of $1 par value common stock at$10 per share.
• May 22 - Purchased 1,300 shares of treasury stock-common at $13 per share.
• Sep. 22 - Sold 500 shares of treasury stock-common at$23 per share.
• Oct. 14 - Sold 800 shares of treasury stock-common at $9 per share.

Journalize the transactions.

Aruba Corporation recently organized. The company issued common stock to an inventor in exchange for a patent with a market value of $57,000. In addition, Aruba received cash for 6,000 shares of its$10 par preferred stock at par value and 6,500 shares of its no-par common stock at $20 per share. Without making journal entries, determine the total paid-in capital created by these transactions.

The charter of Evergreen Corporation authorizes the issuance of 900 shares of preferred stock and 1,400 shares of common stock. During a two-month period, Evergreen completed these stock-issuance transactions:

• Mar. 23 - Issued 230 shares of $3 par value common stock for cash of$15 per share.
• Apr. 12 - Received inventory with a market value of $27,000 and equipment with a market value of$19,000 for 320 shares of the $3 par value common stock.
•         17 - Issued 900 shares of 5%,$20 par value preferred stock for $20 per share.

Requirements

1. Record the transactions in the general journal.
2. Prepare the stockholders' equity section of the Evergreen balance sheet as of April 30, 2018, for the transactions given in this exercise. Retained Earnings has a balance of$73,000 at April 30, 2018.

Refer to the information presented in the preceding exercise. ABC had 8,000 shares of common stock outstanding during 2018. ABC declared and paid preferred dividends of $4,000 during 2018. Show how ABC reports EPS data on its 2018 income statement.

Supreme Water Sports has 12,000 shares of $2 par common stock outstanding. Supreme distributes a 5% stock dividend when the market value of its stock is$22 per share. Requirements

1. Journalize Supreme’s distribution of the stock dividend on August 31. An explanation is not required.
2. What is the overall effect of the stock dividend on Supreme’s total assets?
3. What is the overall effect on total stockholders’ equity?

Major sports plans to raise $5,000,000 in an initial public offering of its common stock; the company is considering 3 options.

A. Issue 100,000 shares of$1 par value common stock for $50 per share.

B. Issue 500,000 shares of$1 par value common stock for $10 per share.

C. issue 1,000,000 shares of$1 par value common stock for $5 per share.

Record the issuance of common stock for each option.

Steller Systems completed the following stock issuance transactions:

• May 19 - Issued 1,700 shares of $3 par value common stock for cash of$10.50 per share.
• Jun.    3 - Issued 300 shares of $9, no-par preferred stock for$15,000 cash.
•         11 - Received equipment with a market value of $68,000 in exchange for 5,000 shares of the$3 par value common stock.

Requirements

1. Journalize the transactions. Explanations are not required.
2. How much paid-in capital did these transactions generate for Steller Systems?

Java Company earned net income of $85,000 during the year ended December 31, 2018. On December 15, Java declared the annual cash dividend on its 4% preferred stock (par value,$120,000) and a $0.25 per share cash dividend on its common stock (50,000 shares). Java then paid the dividends on January 4, 2019.

Requirements

1. Journalize for Java the entry declaring the cash dividends on December 15, 2018.
2. Journalize for Java the entry paying the cash dividends on January 4, 2019.

Decor and More Imports recently reported the following stockholders' equity:

$$\begin{array}{c} \textbf{Stockholders' Equity}\\ \end{array}$$

$$\begin{array}{lrr} \text{Paid-In Capital:}\\ \hspace{10pt}\text{Common Stock-\$1 Par Value; 490,000,000 shares}\\ \hspace{20pt}\text{authorized, 119,000,000 shares issued and outstanding}&\text{\$\hspace{5pt}119,000,000}\\ \hspace{10pt}\text{Paid-In Capital in Excess of Par-Common}&\underline{\text{\hspace{10pt}148,000,000}}\\ \hspace{10pt}\text{Total Paid-In Capital}&\text{\$\hspace{5pt}267,000,000}\\ \text{Retained Earnings}&\underline{\text{\hspace{10pt}654,000,000}}\\ \text{Total Stockholders' Equity}&\text{\underline{\underline{\$\hspace{5pt}921,000,000}}}\\ \end{array}$$

Suppose Decor and More split its common stock 2-for-1 in order to decrease the market price per share of its stock. The company's stock was trading at $17 per share immediately before the split.

Requirements

1. Prepare the stockholders' equity section of the Decor and More Imports balance sheet after the stock split.
2. Were the account balances changed or unchanged after the stock split?

Vasquez issued a $400,000 face value, 8%, 20-year bond at 95. Which of the following is the correct journal entry to record the retirement of the bond at maturity?

A bond that matures in installments at regular intervals is a a. term bond. c. periodic bond. b. serial bond. d. terminal bond.