1. Stockholders’ Equity
Chapter 13
Exercises

2. Issuing Stock In-Class Exercise (Form groups and work exercise):
Exercise Page
E Stock Issue Transactions
(Use the format, as reflected on the next slide, to complete this exercise)

3. Issuing Stock General Journal Exercise Page
Date Description Debit Credit
Exercise Page
E Issuing Stock at Par and No-Par

4. Issuing Stock Exercise E13-22:
The charter of Evergreen Capital Corporation authorizes the issuance of 900 shares of preferred stock and 1,250 shares of common stock. During a two-month period, Evergreen completed these stock issuance transactions:
Mar Issues 230 shares of $4 par value common stock for cash of $5 per share.
Apr Received inventory with a market value of $23,000 and equipment with a market value of $20,000 for 320 shares of the $4 par value common stock.
17 Issued 900 shares of 5%, $20 par value preferred stock for $20 per share.
Requirements: (1) Record the transactions in the general journal. (2) Prepare the stockholders’ equity section of the Evergreen balance sheet as of April 30, Retained Earnings balance is $79,000.

5. Issuing Stock

6. Issuing Stock

7. Issuing Stock
End of Exercise

8. Cash Dividends In-Class Exercise (Form groups and work exercises):
Exercise Page
E Dividends-Common/Preferred (Cumulative)

9. Cash Dividends Exercise E13-23:
Northern Communications has the following stockholders’ equity:
Preferred Stock – 6%, $11 Par Value; 150,000 shares authorized, 20,000 shares issued and outstanding…….. $ 220,000
Common Stock -- $3 Par Value; 575,000 shares authorized, 400,000 shares issued and outstanding…… $1,200,000
Retained Earnings……………………………………………... $ 190,000
Requirements: (1) Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and stockholders for and 2015 if total dividend are if total dividends are $12,200 in and $55,000 in (2) Record the journal entries for 2014, assuming that Northern declared the dividend on December 1 for stockholders of record on December 10. Northern paid the dividend on December 20. (3) Record the journal entries for 2015, assuming that Northern declared the dividend on December 1 for stockholders of record on December 15. Northern paid the dividend on December 28.

10. Preferred Dividend Requirement
Cash Dividends
Preferred Dividend Requirement
Note: Preferred stockholders are entitled to no more than $13,200 in any one year as follow: (a) $11 par value x 6% = $.66 per share (b) $.66 x 20,000 shares = $13,200

11. Preferred dividends in arrears $13.200 - $12,200 = $1,000
Cash Dividends
Preferred dividends in arrears $ $12,200 = $1,000

12. Cash Dividends

13. Cash Dividends
Note: Preferred stockholders are entitled to the same $13,200 dividend requirement as in year 2014

14. Cash Dividends

15. Cash Dividends

16. Cash Dividends

17. Cash Dividends
End of Exercise

18. Cash and Stock Dividends
In-Class Exercise (Form groups and work exercise):
Exercise Page
E Cash and Stock Dividends
(Use the format, as reflected on the next slide, to complete this exercise)

19. Cash and Stock Dividends
General Journal
Date Description Debit Credit
Exercise Page
E Cash and Stock Dividends

20. Cash and Stock Dividends
Exercise E13-26:
Painting Schools, Inc. is authorized to issue 200,000 shares of $1 par common stock.
The company issued 77,000 shares at $3 per share.
When the market price of common stock was $5 per share, Painting declared and distributed a 10% stock dividend.
Later, Painting declared and paid a $0.25 per share cash dividend.
Requirements:
(1) Journalize the declaration and the distribution of the stock dividend.
(2) Journalize the declaration and the payment of the cash dividend.

21. Cash and Stock Dividends
Dividend Shares Computation 77,000 shares x 10% = 7,700 shares 7,700 shares x $5 = $38,500

22. Cash and Stock Dividends
7,700 shares x $1 = $7,700

23. Cash and Stock Dividends
Common

24. Cash and Stock Dividends
77,000 shares + 7,700 shares = 84,700 84,700 shares x $0.25 = $21,175

25. Cash and Stock Dividends

26. Cash and Stock Dividends
End of Exercise

27. Treasury Stock Transactions
In-Class Exercise (Form groups and work exercise):
Exercise No Page
E Treasury Stock Transactions
(Use the format, as reflected on the next slide, to complete this exercise)

28. Treasury Stock Transactions
General Journal
Date Description Debit Credit
Exercise Page
E Treasury Stock

29. Treasury Stock Transactions
Exercise E13-30:
Stock transactions for Careful Driving School, Inc. follows:
Mar Issued 22,000 shares of $1 par value common stock at $18 per share.
May 22 Purchased 1,400 shares of treasury stock – common at $11 per share.
Sep Sold 500 shares of treasury stock – common at $24 per share.
Oct Sold 900 shares of treasury stock – common at $9 per share.
Requirement:
(1) Journalize the transactions.

30. Treasury Stock Transactions

31. Treasury Stock Transactions
End of Exercise