CHAPTER 13

EXERCISES: SET B
E13-1B During its first year of operations, Moyer Corporation had the following transac- Journalize issuance of
tions pertaining to its common stock. common stock.

Jan. 10 Issued 80,000 shares for cash at $5 per share. (LO 2)

July 1 Issued 50,000 shares for cash at $7 per share.
Instructions
(a) Journalize the transactions, assuming that the common stock has a par value of $5 per share.
(b) Journalize the transactions, assuming that the common stock is no-par with a stated
value of $1 per share.

E13-2B Tresh Corporation issued 2,000 shares of stock. Journalize issuance of

common stock.
Instructions
Prepare the entry for the issuance under the following assumptions. (LO 2)

(a) The stock had a par value of $5 per share and was issued for a total of $52,000.
(b) The stock had a stated value of $5 per share and was issued for a total of $52,000.
(c) The stock had no par or stated value and was issued for a total of $52,000.
(d) The stock had a par value of $5 per share and was issued to attorneys for services
during incorporation valued at $52,000.
(e) The stock had a par value of $5 per share and was issued for land worth $52,000.

E13-3B Glaser Co. had the following transactions during the current period. Journalize issuance of
Mar. 2 Issued 4,000 shares of $5 par value common stock to attorneys in payment of a common and preferred stock
and purchase of treasury
bill for $30,000 for services provided in helping the company to incorporate.
stock.
June 12 Issued 50,000 shares of $5 par value common stock for cash of $375,000.
July 11 Issued 2,000 shares of $100 par value preferred stock for cash at $110 per share. (LO 2, 3)
Nov. 28 Purchased 2,000 shares of treasury stock for $80,000.
Instructions
Journalize the transactions.

E13-4B As an auditor for the CPA firm of Tick and Tack, you encounter the following Journalize noncash common
situations in auditing different clients. stock transactions.
1. Page Corporation is a closely held corporation whose stock is not publicly traded. On (LO 2)
December 5, the corporation acquired land by issuing 4,000 shares of its $20 par value
common stock. The owners’ asking price for the land was $120,000, and the fair value
of the land was $115,000.
2. Huebner Corporation is a publicly held corporation whose common stock is traded on
the securities markets. On June 1, it acquired land by issuing 20,000 shares of its $10
par value stock. At the time of the exchange, the land was advertised for sale at $275,000.
The stock was selling at $13 per share.

Instructions
Prepare the journal entries for each of the situations above.

E13-5B On January 1, 2017, the stockholders’ equity section of Pujols Corporation shows: Journalize treasury stock
Common stock ($5 par value) $1,500,000; paid-in capital in excess of par $1,000,000; and transactions.
retained earnings $1,200,000. During the year, the following treasury stock transactions (LO 3)
occurred.
Mar. 1 Purchased 50,000 shares for cash at $17 per share.
July 1 Sold 10,000 treasury shares for cash at $18 per share.
Sept. 1 Sold 8,000 treasury shares for cash at $16 per share.

Instructions
(a) Journalize the treasury stock transactions.
(b) Restate the entry for September 1, assuming the treasury shares were sold at $14 per share.

E13-6B Wood Corporation purchased from its stockholders 5,000 shares of its own pre- Journalize treasury stock
viously issued stock for $250,000. It later resold 2,000 shares for $53 per share, then 2,000 transactions.
more shares for $48 per share, and finally 1,000 shares for $43 per share. (LO 3)
2 13 Corporations: Organization and Capital Stock Transactions

Instructions
Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.

Journalize preferred stock E13-7B Tidwell Corporation is authorized to issue both preferred and common stock.
transactions and indicate The par value of the preferred is $40. During the first year of operations, the company had
statement presentation. the following events and transactions pertaining to its preferred stock.
(LO 2, 4) Feb. 1 Issued 20,000 shares for cash at $53 per share.
July 1 Issued 12,000 shares for cash at $57 per share.
Instructions
(a) Journalize the transactions.
(b) Post to the stockholders’ equity accounts.
(c) Indicate the financial statement presentation of the related accounts.
Prepare correct entries for E13-8B Hays Corporation recently hired a new accountant with extensive experience in
capital stock transactions. accounting for partnerships. Because of the pressure of the new job, the accountant was
(LO 2, 3) unable to review his textbooks on the topic of corporation accounting. During the first
month, the accountant made the following entries for the corporation’s capital stock.
May 2 Cash 120,000
Capital Stock 120,000
(Issued 10,000 shares of $10 par value
common stock at $12 per share)
10 Cash 900,000
Capital Stock 900,000
(Issued 15,000 shares of $50 par value
preferred stock at $60 per share)
15 Capital Stock 13,000
Cash 13,000
(Purchased 1,000 shares of common stock
for the treasury at $13 per share)
31 Cash 8,000
Capital Stock 5,000
Gain on Sale of Stock 3,000
(Sold 500 shares of treasury stock at $16
per share)
Instructions
On the basis of the explanation for each entry, prepare the entry that should have been
made for the capital stock transactions.

Prepare a stockholders’ equity E13-9B The following stockholders’ equity accounts, arranged alphabetically, are in the
section. ledger of Pinkston Corporation at December 31, 2017.
(LO 4) Common Stock ($5 stated value) $1,900,000
Paid-in Capital in Excess of Par—Preferred Stock 280,000
Paid-in Capital in Excess of Stated Value—Common Stock 900,000
Preferred Stock (8%, $100 par, noncumulative) 500,000
Retained Earnings 1,234,000
Treasury Stock (10,000 shares) 120,000
Instructions
Prepare the stockholders’ equity section of the balance sheet at December 31, 2017.

Answer questions about E13-10B The stockholders’ equity section of Ralston Corporation at December 31 is as follows.
stockholders’ equity section.
RALSTON CORPORATION
(LO 2, 3, 4)
Balance Sheet (partial)
Paid-in capital
Preferred stock, 10,000 shares authorized, 4,000 shares issued
and outstanding $ 300,000
Common stock, no par, 750,000 shares authorized, 400,000 shares issued 1,200,000
Total paid-in capital 1,500,000
Retained earnings 1,858,000
Total paid-in capital and retained earnings 3,358,000
Less: Treasury stock (15,000 common shares) 64,000
Total stockholders’ equity $3,294,000
 Exercises: Set B 3

Instructions
From a review of the stockholders’ equity section, as chief accountant, write a
memo to the president of the company answering the following questions.
(a) How many shares of common stock are outstanding?
(b) Assuming there is a stated value, what is the stated value of the common stock?
(c) What is the par value of the preferred stock?

E13-11B In a recent year, the stockholders’ equity section of Aluminum Company of Prepare a stockholders’ equity
America (Alcoa) showed the following (in alphabetical order): additional paid-in capital section.
$5,720, common stock $925, preferred stock $55, retained earnings $9,345, and treasury (LO 4)
stock $1,899. All dollar data are in millions.
The preferred stock has 660,000 shares authorized, with a par value of $100 and an
annual $3.75 per share cumulative dividend preference. At December 31, 546,024 shares
of preferred are issued and outstanding. There are 1.8 billion shares of $1 par value common
stock authorized, of which 924.6 million are issued and 870.3 million are outstanding at
December 31.

Instructions
Prepare the stockholders’ equity section, including disclosure of all relevant data.