Question

craw-Hill Connect HW Ch 18 (Required & For-Credit) Part A In Late 2017. The Nicklaus Corporation Was-1 Chee Fequired & For-Credit) i Help Save & Exit Submit Check my work Part A In late 2017, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4.000.000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2 2018, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $12 per share. Also on January all 1,000,000 shares of preferred stock are issued at $30 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2018. (Assume net income for the first quarter 2018 was $1,300,000.) nonparticipating preferred sto S of preferred stock are issue issued in exchange for cash at Part B During 2018, the Nicklaus Corporation participated in three treasury stock transaction a. On June 30, 2018, the corporation reacquires 150,000 shares for the treasury at a price of $14 per shar b. On July 31, 2018, 25,000 treasury shares are reissued at $17 per share. c. On September 30, 2018, 25,000 treasury shares are reissued at $12 per share. Required: 1. Prepare journal entries to record these transactions 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $2,750,000.) Part C On October 1, 2018, Nicklaus Corporation receives permission to replace its 51 par value common stock (4,000,000 shares authorized, 2,000,000 shares issued, and 1,900,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2 for 1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. < Prev 4 of 4 * Next

Answer 1

PART-A PAGE 1 Stol of COMMON STOCK Tscue ENTRY Share of common stock/equity) application / allotment al-Dr. $4,000,000 10 Share & Common Stock Capital AC $4,000,00 Bring shares of Common Stock issued at par v Value of $2 in 4,000,000 Sheres @ $1) PREFERENCE SHARE IQUE ENTRY Preference shares sorpplication fallotment slc- Dr. $5.000.000 To Preference share Capital Ale $5,000,000 Preference shares for eved at Bar Valur of $5 ie 1,000,000 harus @85) EXCHANGE ENTRY - hinh jqyuary 2, 2018 (2.000.000 @ $12) Cash AC -Dr. $24,000,000 (2000,000 @ $1 To Common Stock All Balance To Paid in Capital A/L (Bung Shares / Stock issued at T exchange for Cash) $2.000.000 $22.000.000

PAGE-2) January 2, 2018 (1,000,000 @ $30) (1,000,000 @ 85 I Balance Car ALL - Dr. $30,000,000 to preference shares stockA/L To Pai in Capital Alc Preference Shary stock issued at Exchange for Cash) $500goon $25.000 SHAREHOLDER'S GOurry Particular Amount ( a Common stock Preference share stolk Paid in Capital (22,000,000 +25,000 STOCKHOLDER'S SHAREHOLDER'S EQUITY 2,000,000 NIL 47,000,000 $49.000.000