ACCOUNTING ASSIGNMENT Harvard Case Solution & Analysis

ACCOUNTING ASSIGNMENT Case Study Solution 

A corporation issues 500 shares of $10 par common stock and 500 shares of $5 par preferred stock for a total of $15000. The market value of the common stock is $20 per share and the market value of the preferred stock is $12 per share. What amount should be credited to the paid in capital in excess of par-preferred stock?

  1. 3125
  2. 3500
  3. 4375
  4. 5625
  5. None of the above. The Answer is _______3500

A corporation was organized on January 1 with an authorization of 500,000 shares of common stock with a par value of $5 per share. During the year the corporation has the following common stock transactions:

January            - Issued 25000 shares at $5 per share
April-   Issued 12500 shares at $7 per share
June-    Issued 3750 shares at $10 per share
July      purchased 6250 shares at $4 per share
Dec 21 sold 6250 Shares held in treasury at $8 per share

A corporation used the cost method to record the purchased and re-issuance of the treasury shares. What should the balance of additional paid in capital reported in the balance sheet at December 31?

  1. 50000
  2. 56250
  3. 62500
  4. 68750
  5. None of the above. The Answer is ______68750

A corporation was organized January 1, 2012. On the date it issued 50000 shares of its $10 par value common stock at $15 per share (500,000 were authorized). During the period 1/1/12 through 12/31/14, A reported net income of 287,500 and paid cash dividends of 95,000. On 01/05/14, purchased 3,000 shares of its common stock at 12.00 per share. On 12/30/2014 2,000 treasury shares were sold at $8 per share. And used the cost method of accounting for treasury shares. What is the total stockholders’ equity at A at December 31 2014?

  1. 922500
  2. 926500
  3. 934500
  4. 942500
  5. None of the above. The answer is _______926500_______.

A corporation has 100,000 shares of $50 par value common stock authorized, issued and outstanding. All 100,000 shares were issued at $55 per share. Retained earnings of the company amounts of $800,000. If 4000 shares of common stock are reacquired by the corporation at $62 per share and the cost method of accounting for treasury stock is used, stockholders equity would decrease by

  1. 0
  2. 200000
  3. 220000
  4. 248000
  5. None of the above. The answer is _______248000

A company uses the cost method of accounting for treasury shares. On January1 issued 10,000 shares of its $20 par value common stock for $450,000. On Oct 15 it reacquired 400 shares of its own stock for $16.000. Dec 20 A sold 200 of the treasury shares for $9000. The other 200 treasury shares are formally retired on Dec 31. The entry on Dec 3 should include a:

  1. Debit to common stock, $8000
  2. Debit to paid in capital in excess of par, $4000
  3. Credit to treasury stock, $4000
  4. Credit to retained earnings, $1000
  5. Credit to treasury stock, $8000

A corporation has the following classes of stock outstanding as of December 31 2014.

Common Stock           $20 par value, $20000 shares outstanding
Preferred Stock 6% $100 par value, cumulative and participating distributions on excess of 9%, 1000 shares outstanding

Dividends on preferred stock are in arrears for 2012 and 2013. On December 31 2014 a total of cash dividends of $90000 was declared. What is the dividend per share on common stock for 12/31/14 dividends?

  1. 12
  2. 24
  3. 45
  4. 60
  5. None of the above. The answer is $ ______None of the above

On October 15, the stock holder’s equity section of A Corporation was as follows:

Common stock, par value $25, authorized 1,000,000 shares issued and
outstanding 300,000 shares                                                    7,500,000
Additional Paid in Capital                                                      1,400,000
Retained Earnings                                                                   1,890,000
                                                                                                10,790,000

On October 15 the board of director of A declared a 5% stock dividend on common stock to be distributed on Nov 10 to shareholders of record on Nov 1. The market price of A common stock on each of these dates was as follows

Oct 15-$30                  Nov 1-$31                   Nov 10-$32

What is the amount of the debit to retained earnings as a result of the declaration and distribution of this stock dividend?

  1. 375,000
  2. 450,000
  3. 465,000
  4. 480,000
  5. The Answer is ______465000_______.

The director of A company, whose $40 par common stock is currently selling at $50 per share, have decided to issue a stock dividend. The corporation has an authorization for 1,000,000 shares of common, has issued 240,000 shares of which 40,000 are now held as treasury stock and desires to capitalize $1,000,000 of the retained earnings balance. Toaccomplish this, the percentage of stock dividends that the directors should declare is.

  1. 33
  2. 10
  3. 42
  4. 5
  5. The Answer is _____12.5_______.

In order to retain certain key executives, a corporation granted them incentive stock options on December 31 2014. 10,000 options were granted at an option price of $35 per share. Market price of the stock were as follows;

December 31 2011      $46 per share
December 31 2012      $51 per share.....................

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