The stockholders’ equity section of Leyland Corporation’s balance sheet at December 31 is presented here.

$$\begin{array}{c} \textbf{LEYLAND CORPORATION}\\ \textbf{Balance Sheet (partial)}\\ \end{array}$$

$$\begin{array}{lrr} \text{Stockholders’ equity}\\ \qquad\text{Paid-in capital}\\ \qquad\qquad\text{Preferred stock, cumulative, 10,000 shares authorized,}\\ \qquad\qquad\qquad\text{6,000 shares issued and outstanding}&\text{\$\hspace{7pt}600,000}\\ \qquad\qquad\text{Common stock, no par, 750,000 shares authorized,}\\ \qquad\qquad\qquad\text{580,000 shares issued}&\underline{\text{\hspace{6pt}2,900,000}}\\ \qquad\qquad\qquad\text{Total paid-in capital}&\text{\hspace{1pt}3,500,000}\\ \qquad\text{Retained earnings}&\underline{\text{\hspace{6pt}1,158,000}}\\ \qquad\text{Total paid-in capital and retained earnings}&\text{\hspace{1pt}4,658,000}\\ \qquad\text{Less: Treasury stock (6,000 common shares)}&\underline{\text{\hspace{19pt}32,000}}\\ \text{Total stockholders’ equity}&\underline{\underline{\text{\$\hspace{1pt}4,626,000}}}\\ \end{array}$$

Instructions

From a review of the stockholders’ equity section, answer the following questions.

(b) Assuming there is a stated value, what is the stated value of the common stock?

The stockholders’ equity section of Leyland Corporation’s balance sheet at December 31 is presented here.

$$\begin{array}{c} \textbf{LEYLAND CORPORATION}\\ \textbf{Balance Sheet (partial)}\\ \end{array}$$

$$\begin{array}{lrr} \text{Stockholders’ equity}\\ \qquad\text{Paid-in capital}\\ \qquad\qquad\text{Preferred stock, cumulative, 10,000 shares authorized,}\\ \qquad\qquad\qquad\text{6,000 shares issued and outstanding}&\text{\$\hspace{7pt}600,000}\\ \qquad\qquad\text{Common stock, no par, 750,000 shares authorized,}\\ \qquad\qquad\qquad\text{580,000 shares issued}&\underline{\text{\hspace{6pt}2,900,000}}\\ \qquad\qquad\qquad\text{Total paid-in capital}&\text{\hspace{1pt}3,500,000}\\ \qquad\text{Retained earnings}&\underline{\text{\hspace{6pt}1,158,000}}\\ \qquad\text{Total paid-in capital and retained earnings}&\text{\hspace{1pt}4,658,000}\\ \qquad\text{Less: Treasury stock (6,000 common shares)}&\underline{\text{\hspace{19pt}32,000}}\\ \text{Total stockholders’ equity}&\underline{\underline{\text{\$\hspace{1pt}4,626,000}}}\\ \end{array}$$

Instructions

From a review of the stockholders’ equity section, answer the following questions.

(a) How many shares of common stock are outstanding?

The April 23, 2012, edition of the Wall Street Journal Online contains an article by Christopher Bjork entitled “Santander Prepares Record Mexico IPO.”

Instructions

Read the article and answer the following questions.

(a) Why is the Spanish lender Santander issuing shares of its Mexican banking subsidiary to the public?

The November 10, 2011, edition of the Financial Times contains an article by Alan Rappeport entitled “McDonald’s Looks to Buy More Property.”

Instructions

Read the article and answer the following questions.

(a) Why is McDonald’s shifting away from leasing its properties toward purchasing them?

What are the basic ownership rights of common stockholders in the absence of restrictive provisions? Discuss.

Pringle Inc. issues 8,000 shares of $100 par value preferred stock for cash at$106 per share. Journalize the issuance of the preferred stock.

Fusion Corporation has 3,000 shares of 8%, $100 par value preferred stock outstanding at December 31, 2014. At December 31, 2014, the company declared a$105,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios.

1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years.
2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years.
3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years.

Meranda 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 40,000 shares for cash at$51 per share.
July 1 Issued 60,000 shares for cash at $56 per share.

Instructions

(c) Discuss the statement presentation of the accounts.

Meranda 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 40,000 shares for cash at$51 per share.
July 1 Issued 60,000 shares for cash at $56 per share.

Instructions

(b) Post to the stockholders’ equity accounts. (Use T-accounts.)

The March 15, 2010, edition of the Wall Street Journal includes an article by Martin Peers entitled “Media’s Cash Focus Is Paying Dividends.”

Instructions

Read the article and answer the following questions.

(a) What action did Viacom take with its excess cash before it decided to consider paying dividends or stock buybacks?

Meranda 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 40,000 shares for cash at$51 per share.
July 1 Issued 60,000 shares for cash at $56 per share.

Instructions

(a) Journalize the transactions.

On December 31, 2013, Paxson Company had 1,300,000 shares of $5 par common stock issued and outstanding. At December 31, 2013, stockholders’ equity had the amounts listed here.

Common Stock$6,500,000
Additional Paid-in Capital      1,800,000
Retained Earnings               1,200,000

Transactions during 2014 and other information related to stockholders’ equity accounts were as follows.

1. On January 10, 2014, issued at $107 per share 120,000 shares of$100 par value, 9% cumulative preferred stock.
2. On February 8, 2014, reacquired 15,000 shares of its common stock for $11 per share.
3. On May 9, 2014, declared the yearly cash dividend on preferred stock, payable June 10, 2014, to stockholders of record on May 31, 2014.
4. On June 8, 2014, declared a cash dividend of$1.20 per share on the common stock outstanding, payable on July 10, 2014, to stockholders of record on July 1, 2014.
5. Net income for the year was $3,600,000.

Instructions

Prepare the stockholders’ equity section of Paxson’s balance sheet at December 31, 2014.

Vangundy Co. had the following transactions during the current period.

June 12 Issued 60,000 shares of $1 par value ordinary shares for cash of$375,000.
July 11 Issued 1,000 shares of $100 par value preference shares for cash at$110 per share.
Nov. 28 Purchased 2,000 treasury shares for $80,000.

Instructions

Journalize the above transactions.

On June 1, Tucker Inc. issues 3,000 shares of no-par common stock at a cash price of $7 per share. Journalize the issuance of the shares.