Question

Packet Exercise 11.4 fyler Corporation was organized in 2018. Its corporate charter authorized the issuance of 500,000 shares of common stock with a par value $5 per share and 10,000 shares of 8% preferred stock. The preferred stock has a par value of $20 per share. Part A - Prepare journal entries for each of the following transactions: January 1, 2018 Sold and issued 45,000 shares of common stock for cash at $25 per share Date Account Debit Credit February 1, 2018 Sold and issued 5,000 shares of preferred stock for cash at par value ($20 per share). Date Credit Debit June 1, 2018 Purchased 7,500 shares of the company's own common stock at a cost of $24 per share. Debit Credit Date Account August 1, 2018 Reissued (sold) 1,000 shares of the treasury stock at $26 per share. Debit Credit Account Date October 1, 2018 Reissued (sold) another 1,500 shares of the treasury stock at $23 per share Account Credit Debit Date 179

Answer 1

11.4 : Part A :

In the books of Tyler Corporation :

Date	Account	Debit	Credit
		$	$
January 1, 2018	Cash	1,125,000
	Common Stock ( 45,000 x $ 5)		225,000
	Paid-in Capital in Excess of Par : Common Stock		900,000
February 1, 2018	Cash	100,000
	Preferred Stock		100,000
June 1, 2018	Treasury Stock ( 7,500 shares @ $ 24)	180,000
	Cash		180,000
August 1, 2018	Cash	26,000
	Treasury Stock ( 1,000 shares @ $ 24)		24,000
	Paid-in Capital : Treasury Stock		2,000
October 1, 2018	Cash	34,500
	Paid-in Capital: Treasury Stock	1,500
	Treasury Stock ( 1,500 shares @ $ 24)		36,000

Part B :

Number of shares of common stock issued and outstanding as of December 31, 2018 = 45,000 - 7,500 + 1,000 + 1,500 = 40,000 shares.

	Preferred Stock	Common Stock
Total Dividends	$ 8,000	$ 92,000
Dividends per Share	$ 1.60	$ 2.30

Part C:

Dividend yield ratio for common stock = $ 2.30 / $ 25.55 * 100 = 9 %