ACCT322, Final Exam Review Problem, Ch. 14-15
During the year, EasyTest Corporation had the following transactions:
1
Issued common stock for cash at a price greater than its par value.
2.
Purchased treasury stock with cash (assume the cost method).
3.
Borrowed money by issuing a non-interest bearing note with a face value including principal and interest.
4.
Declared a 15% stock dividend when the market value of the stock was higher than the par value.
5.
Amortized the interest on the non-interest-bearing note.
6.
Declared a cash dividend, a portion of which was a liquidating dividend.
7.
Distributed the stock dividend declared above.
8.
The date of record occurred for the cash dividend declared above.
9.
Paid the cash dividend declared above.
10.
Completed a 2-for-1 stock split in which the $10 par value common stock was changed to $5 par value stock.
11.
Sold treasury stock (cost method) and received more cash than the original cost of the treasury stock.
12.
Issued bonds at a price of 103, plus accrued interest (interest payable account used), plus paid for bond issue costs.
13.
Paid interest for the semi-annual period on bonds issued above. Also amortized any premium/discount and issue costs.
14.
Recorded an increase in the value of an asset that will be distributed as a property dividend.
15.
Declared the property dividend above.
16.
Distributed the property dividend to stockholders.
17.
Declared a 30% stock dividend when the market value of the stock was higher than the par value.
18.
Distributed the stock dividend declared above.
19.
Issued shares of common stock for land. The land had a fair market value in excess of the par value of the shares issued.
20.
Appropriated a portion of retained earnings in accordance with the requirements in a bond indenture.
Instructions:
Indicate the effect(s) of each transaction on the balance sheet categories. Use “+”for increase, “-“ for decrease, and blank for no effect.
Stockholders’ Equity
Total
Assets
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Liabilities
Capital Stock
(Common,
Preferred, etc.)
Paid-in Capital >
Par Value
Retained
Earnings
Treasury
Stock
Total Stockholders’
Equity