# Intermesiate Accounting 3 Cht 18

716 Words3 Pages
Chapter 18 In-Class Problems (with solutions) ACG3151 1. At the end of 2009, Company XYZ decides to incorporate. The state authorizes XYZ to issue 1,000,000 shares of common stock. On 1/1/2010 they decide to issue 100,000 shares. Later in the year they repurchase 20,000 shares. How many shares are authorized, issued, outstanding, and treasury? Authorized=1,000,000 Issued=100,000 Outstanding=80,000 Treasury=20,000 2. On 1/1/2008 Company ABC issued 100,000 shares of \$1 par common stock and 1,000 shares of \$200 par 10% cumulative participating preferred stock for \$2,000,000. At the time of the issuance the common stock was trading at \$15 per share, and the preferred stock value is unknown. ABC pays no dividend in 2008 or 2009, and they decide to pay \$90,000 in dividends in at the end of 2010. Prepare the necessary journal entries to record the issuance. Cash \$2,000,000 Common Stock \$100,000 APIC-C.S. \$1,400,000 Preferred Stock \$200,000 APIC-P.S. \$300,000 What if the preferred stock was trading at \$1,000 per share? Cash \$2,000,000 Common Stock \$100,000 APIC-C.S. \$1,100,000 Preferred Stock \$200,000 APIC-P.S. \$600,000 Chapter 18 In-Class Problems (with solutions) ACG3151 How much of the dividend will be paid to the common shareholders, and how much will be paid to the preferred shareholders? Common Shareholders=\$10,000 Preferred Shareholders=\$80,000(\$60,000 cumulative, \$20,000 participating) 3. Tom, Inc. issued 1,000,000 shares of \$2 par common stock in 2005 for \$9 per share. In 2008 Tom, Inc. repurchased 100,000 shares at a price of \$8 per share. On March 30, 2009 they decide to resell 50,000 shares at a price of \$13 per share. There is a current balance in the APIC-share repurchase account of \$40,000. Prepare the necessary journal entries to record these transactions if Tom, Inc. classifies the repurchase as treasury stock. Original issue