Chapter 14 Flashcards
Buttercup Corporation issued 300 shares of $10 par value common stock for $4,500. Prepare Buttercup’s journal entry.
D - Cash: 4,500
C - Common Stock (10 x 300): 3,000
C - Paid-in Capital in Excess of Par - Common Stock: 1,500
Swarten Corporation issued 600 shares of no-par common stock for $8,200. Prepare Swarten’s journal entry if (a) the stock has no stated value, and (b) the stock has a stated value of $2 per share.
(a)
D - Cash: 8,200
C - Common Stock: 8,200
(b)
D - Cash: 8,200
C - Common Stock (2 x 600): 1,200
C - Paid-in Capital in Excess of Par - Common Stock: 7,000
On February 1, 2025, Buffalo Corporation issued 3,000 shares of its $5 par value common stock for land worth $31,000. Prepare the February 1, 2025, journal entry.
D - Land: 31,000
C - Common Stock (5 x 3,000): 15,000
C - Paid-in Capital in Excess of Par - Common Stock (31,000 - 15,000): 16,000
Hinges Corporation issued 500 shares of $100 par value preferred stock for $61,500. Prepare Hinges’s journal entry.
D - Cash: 61,500
C - Preferred Stock (100 x 500): 50,000
C - Paid-in Capital in Excess of Par - Preferred Stock: 11,500
Sprinkle Inc. has outstanding 10,000 shares of $10 par value common stock. On July 1, 2025, Sprinkle reacquired 100 shares at $87 per share. On September 1, Sprinkle reissued 60 shares at $90 per share. On November 1, Sprinkle reissued 40 shares at $83 per share. Prepare Sprinkle’s journal entries to record these transactions using the cost method.
7/1:
D - Treasury Stock (87 x 100): 8,700
C - Cash: 8,700
9/1:
D - Cash (90 x 60): 5,400
C - Treasury Stock (87 x 60): 5,220
C - Paid-in Capital - Treasury Stock: 180
11/1:
D - Cash (83 x 40): 3,320
D - Paid-in Capital - Treasury Stock: 160
C - Treasury Stock (87 x 40): 3,480
Woolford Inc. declared a cash dividend of $1.00 per share on its 2 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record on August 15. Prepare all journal entries necessary on those three dates.
8/1:
D - Retained Earnings (1 x 2,000,000): 2,000,000
C - Dividend Payable: 2,000,000
8/15:
No entry
9/9:
D - Dividend Payable: 2,000,000
C - Cash: 2,000,000
Green Day Corporation has outstanding 400,000 shares of $10 par value common stock. The corporation declares a 5% stock dividend when the fair value of the stock is $65 per share. Prepare the journal entries for Green Day Corporation for both the date of declaration and the date of distribution.
Date of Declaration:
400,000 x 5% = 20,000
—
D - Retained Earnings (65 x 20,000): 1,300,000
C - Common Stock Dividend Distributable (10 x 20,000): 200,000
C - Paid-in Capital in Excess of Par - Common Stock (55 x 20,000): 1,100,000
Date of Distribution:
D - Common Stock Dividend Distributable: 200,000
C - Common Stock: 200,000
Green Day Corporation has outstanding 400,000 shares of $10 par value common stock. The corporation declares a 5% stock dividend when the fair value of the stock is $65 per share. Prepare the journal entries for Green Day Corporation for both the date of declaration and the date of distribution.
Use the information from the above problem, but assume Green Day Corporation declared a 100% stock dividend rather than a 5% stock dividend. Prepare the journal entries for both the date of declaration and the date of distribution.
Date of Declaration:
D - Retained Earnings: 4,000,000
C - Common Stock Dividend Distributable (10 x 400,000): 4,000,000
Date of Distribution:
D - Common Stock Dividend Distributable: 4,000,000
C - Common Stock: 4,000,000
Cole Inc. owns shares of Marlin Corporation stock. At December 31, 2025, the securities were carried in Cole’s accounting records at their cost of $875,000, which equals their fair value. On September 21, 2026, when the fair value of the securities was $1,200,000, Cole declared a property dividend whereby the Marlin securities are to be distributed on October 23, 2026, to stockholders of record on October 8, 2026. Prepare all journal entries necessary on those three dates.
9/21:
D - Equity Investments: 325,000
C - Gain on Investment (1,200,000 - 875,000): 325,000
D - Retained Earnings: 1,200,000
C - Property Dividends Payable: 1,200,000
10/8:
No entry
10/23:
D - Property Dividends Payable: 1,200,000
C- Equity Investments: 1,200,000
Kathleen Battle Corporation was organized on January 1, 2025. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.
- 1/10: Issued 80,000 shares of common stock for cash at $5 per share.
- 3/1: Issued 5,000 shares of preferred stock for cash at $108 per share.
- 4/1: Issued 24,000 shares of common stock for land. The asking price of the land was $90,000; the fair value of the land was $80,000.
- 5/1: Issued 80,000 shares of common stock for cash at $7 per share.
8/1: Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for services rendered in helping the company organize.
9/1: Issued 10,000 shares of common stock for cash at $9 per share.
11/1: Issued 1,000 shares of preferred stock for cash at $112 per share.
1/10:
D - Cash (80,000 x 5): 400,000
C - Common Stock (80,000 x 1): 80,000
C - Paid-in Capital in Excess of Stated Value - Common Stock: 320,000
3/1:
D - Cash (5,000 x 108): 540,000
C - Preferred Stock (5,000 x 100): 500,000
C - Paid-in Capital in Excess of Par - Preferred Stock: 40,000
4/1:
D - Land: 80,000
C - Common Stock (24,000 x 1): 24,000
C - Paid-in Capital in Excess of Stated Value - Common Stock: 56,000
5/1:
D - Cash (80,000 x 7): 560,000
C - Common Stock (80,000 x 1): 80,000
C - Paid-in Capital in Excess of Stated Value - Common Stock: 480,000
8/1:
D - Organization Expense: 50,000
C - Common Stock (10,000 x 1): 10,000
C - Paid-in Capital in Excess of Stated Value - Common Stock: 40,000
9/1:
D - Cash (10,000 x 9): 90,000
C - Common Stock (10,000 x 1): 10,000
C - Paid-in Capital in Excess of Stated Value - Common Stock: 80,000
11/1:
D - Cash (1,000 x 112): 112,000
C - Preferred Stock (1,000 x 100): 100,000
C - Paid-in Capital in Excess of Par - Preferred Stock: 12,000
