The post-closing trial balance of Violet Corporation at December 31, - 13982

Solution Posted by
yousafbhutta

yousafbhutta

Rating : (28)C
Solution Detail
Price: $2.00
  • From: Business,
  • Posted on: Tue 18 Sep, 2012
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

 

Problem 14-3A

http://edugen.wileyplus.com/edugen/art2/common/pixel.gif

The post-closing trial balance of Violet Corporation at December 31, 2012, contains the following stockholders’ equity accounts.

Preferred Stock (15,000 shares issued)

 

$ 750,000

Common Stock (250,000 shares issued)

 

2,500,000

Paid-in Capital in Excess of Par—Preferred Stock

 

250,000

Paid-in Capital in Excess of Par—Common Stock

 

400,000

Common Stock Dividends Distributable

 

250,000

Retained Earnings

 

1,042,000



A review of the accounting records reveals the following.

1.

 

No errors have been made in recording 2012 transactions or in preparing the closing entry for net income.

2.

 

Preferred stock is $50 par, 6%, and cumulative; 15,000 shares have been outstanding since January 1, 2011.

3.

 

Authorized stock is 20,000 shares of preferred, 500,000 shares of common with a $10 par value.

4.

 

The January 1 balance in Retained Earnings was $1,170,000.

5.

 

On July 1, 20,000 shares of common stock were issued for cash at $16 per share.

6.

 

On September 1, the company discovered an understatement error of $90,000 in computing depreciation in 2011. The net of tax effect of $63,000 was properly debited directly to Retained Earnings.

7.

 

A cash dividend of $250,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2011.

8.

 

On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $16.

9.

 

Net income for the year was $585,000.

10.

 

On December 31, 2012, the directors authorized disclosure of a $200,000 restriction of retained earnings for plant expansion. (Use Note X.)

 

(a)   Reproduce the Retained Earnings account for 2012. (List items in order presented in the problem.)

(b)   Prepare a retained earnings statement for 2012. (List items that increase retained earnings first.)

(c)    Prepare a stockholders’ equity section at December 31, 2012. (For preferred stock, common stock and treasury stock enter the account name only and do not provide the descriptive information provided in the question.)

d. Compute the allocation of the cash dividend to preferred and common stock.

(e) Compute the earnings per share of common stock using 240,000 as the weighted-average shares outstanding for the year. (Round answer to 2 decimal places, e.g. $5.50.)

Solution Description

 

If you will give me A+++ rating with your nice words in it and you will purchase ten my posted tutorial, you will get 2 tutorial free , Please hurry up limited time offer .

 

Wish you good luck!

Attachments
Problem 14-3A.docx
Problem 14-3A.d...