E15-9 (L01,3) (Preferred Stock Entries and Dividends) Otis Thorpe Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2017. Instructions Answer the questions in each of the following independent situations. (a) If the preferred stock is cumulative and dividends were last paid on the preferred stock on December 31, 2014, what are the dividends in arrears that should be reported on the December 31, 2017, balance sheet? How should these dividends be reported? 814 Chapter 15 Stockholders’ Equity (b) If the preferred stock is convertible into seven shares of $10 par value common stock and 4,000 shares are converted, what entry is required for the conversion assuming the preferred stock was issued at par value? (c) If the preferred stock was issued at $107 per share, how should the preferred stock be reported in the stockholders’ equity section?

Answers

Answer 1
Answer:

Answer:

(a)

Preferred stock Dividend = ( 10,000 x 100 ) x 8% = $80,000

Cumulative Dividend

      Date                   Dividend for the year      Balance

December 31, 2015           $80,0000              $80,000

December 31, 2016           $80,0000              $160,000

December 31, 2017           $80,0000              $240,000

Payable of $240,000 Dividend will be reported on the Balance Sheet.

(b)                                                          Dr.                       Cr.

Preferred Stock (4,000 x $100)   $400,000

Common stock ((4000 x 7) x $10)                            $280,000

Paid-In Capital in excess of Par - Common share  $120,000

(c)

Cash ( 4000 x 107 )                       $428,000

Preferred Stock (4000 x $100)                                 $400,000

Paid-In Capital in excess of Par - Preferred share  $28,000

It will be reported in balance sheet as follow:

Equity                                                                               $

Preferred Stock                                                          400,000

Paid-In Capital in excess of Par - Preferred share     28,000

Explanation:

(a) Last dividend was paid on December 31, 2014, the subsequent 3 years are outstanding until December 31, 2017, so the total payable dividend is $240,000 which will be reported on Balance sheet.

(b) 4000 preferred shares on par value are converted to 7 common shares each at $10 par value.

(c) Preferred stock issued @ $107 will be reported as Preferred stock of $400,000 and Paid-In Capital in excess of Par - Preferred share of $28,000.


Related Questions

Right Medical introduced a new implant that carries a five-year warranty against manufacturer’s defects. Based on industry experience with similar product introductions, warranty costs are expected to approximate 1% of sales. Sales were $15 million and actual warranty expenditures were $20,000 for the first year of selling the product. What amount (if any) should Right report as a liability at the end of the year? (Enter your answers in whole dollars.)
Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $1.75 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt-equity ratio of .80, a cost of equity of 11.5 percent, and an aftertax cost of debt of 4.3 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management uses the subjective approach and applies an adjustment factor of 3 percent to the cost of capital for such risky projects.
During the first year of operation, 2018, McGinnis Appliance recognized $340,000 of service revenue on account. At the end of 2018, the accounts receivable balance was $66,836. Even though this is his first year in business, the owner believes he will collect all but about 5 percent of the ending balance. Required What amount of cash was collected by McGinnis during 2018
Flow of Accounts into Financial Statements The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of owner's equity, or balance sheet. 1. Accounts Payable Balance sheet 2. Accounts Receivable Income statement 3. Cash Statement of owner's equity 4. Eddy Rosewood, Drawing Balance sheet 5. Fees Earned Income statement 6. Supplies Income statement 7. Unearned Rent Balance sheet 8. Utilities Expense Balance sheet 9. Wages Expense 10. Wages Payable
Mandalay Resorts had revenue of $2,462, income from continuing operation of $53, provision for income tax of $40, interest expense of $230, & depreciation & amortization of $216 (all in millions). Mandalay had EBIT (in millions) of: a. $539 b. $323 c. -$217 d. $1,923

you are going to deposit $19000 today. You will earn an annual rateof 3.3 percent for 11 years, and then earn an annual rate of 2.7 percent for 14 years. how much will you have in your account in 25 years?

Answers

Answer:

After 25 years you will have in your account $42,782.05.

Explanation:

First find the Future value of $19000 invested today at the end of 11 years.

PV = - $19,000

Pmt = $0

P/yr = 1

r = 3.30%

n = 11

FV = ?

Using a Financial calculator, the Future Value (FV) after 11 years will be $27,155.46.

Use the $27,155.46 to find future value at the end of the next 14 years at the rate of 2.70%

PV = - $27,155.46

Pmt = $0

P/yr = 1

r = 3.30%

n = 14

FV = ?

Using a Financial calculator, the Future Value (FV) after 14 years will be $42,782.05.

Thus, after 25 years you will have in your account $42,782.05.

A bond with an annual coupon rate of 7.2% sells for $988.22. What is the bond’s current yield? (Round your answer to 2 decimal places.)

Answers

Answer:

7.29%

Explanation:

The computation of the current yield of the bond is shown below;

Current yield is

= (Par value × annual coupon rate) ÷ Selling price of the bond

= ($1,000 × 7.2%) ÷ $988.22

= $72 ÷ $988.22

= 7.29%

Hence, the bond current yield is 7.29%

This is to be computed by applying the above formula so that the current bond yield could arrive

A static budget: _________a. should be compared to actual costs to assess how well costs were controlled.
b. should be compared to a flexible budget to assess how well costs were controlled.
c. is valid for only one level of activity. represents the best way to set spending targets for managers.
d. A planning budget is prepared before the period begins and is valid for only the planned level of activity.

Answers

A static budget a planning budget is prepared before the period begins and is valid for only the planned level of activity. The answer is OPTION D.

A static budget is a type of planning budget that is prepared in advance of a specific period, such as a fiscal year or a quarter. It is based on the expected level of activity or production for that period and sets spending targets for various cost categories. However, a static budget is only valid for the planned level of activity and does not adjust for changes in actual activity levels.

To assess how well costs were controlled during the period, the static budget should be compared to the actual costs incurred. This comparison helps identify any variations or differences between planned and actual performance, which can provide valuable insights for future budgeting and cost management decisions.

In contrast, a flexible budget is a more dynamic tool that adjusts for changes in activity levels. It allows managers to see how costs should have behaved based on the actual level of activity achieved, providing a more accurate evaluation of cost control performance.

To learn more about managers, click here.

brainly.com/question/32150882

#SPJ2

Answer:

Explanation: A planning budget is prepared before the period begins and is valid for only the planned level of activity.

Stoltenberg Co. had the following information for the month of June: Work in process beginning inventory, June 1 2100​ units Units transferred in 16,300​ units Work in process ending inventory, June 30 4100​ unitsBeginning work-in-process inventory is 30 percent complete as to conversion. Ending work-in-process inventory is 50 percent complete as to conversion. Materials are added at the end of the process.
How many units were completed in June?The equivalent units for materials under the weighted-average method are calculated to be?

Answers

Answer:

a) 14,300 units

b)

  Materials:  18,400

Conversion: 16,350

Explanation:

physical count of units:

beginning             2,100

transferred-in     16,300

ending                 (4,100)  

transferred-out   14,300

equialent units for w/a:

transferred-out + percentage of completion ending WIP

Materials: 14,300 + 4,100 x 100% = 18,400

Conversion: 14,300 + 4,100 x 50%  =  16,350

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price? $17.39 $17.84 $18.29 $18.75 $19.22

Answers

Answer:

$18.29

Explanation:

It is very simple as per the question to calculate the current stock price.

The formula for calculating the Stock price is,

P = D/(r-g)

Hence, we calculate as follows,

Price = 0.75/(0.105-0.064)

Price = 0.75/0.041

Price = $18.29

Good Luck.

U.S. residents accounted for over 75 percent of cruise ship passengers, and U.S. ports had 8 million passengers leaving on cruises in 2004. The growth in cruise travel was phenomenal after the terrorist attacks on September 11, 2001. According to a situational analysis, this event created an _____ for the industry.

Answers

Answer: External opportunity

Explanation:

External opportunities are legal, political, economical, social, technological, environmental and cultural factors that may benefit an organization. External opportunities are beyond the control the organization.

In the scenario illustrated, the act of terrorism in the United States on 11th September 2001, led to a growth in cruise travel. This is an example of external opportunity as the growth wasn't caused by an internal factor.