At December 31, 2020, Elkhart Corporation has $1,000,000 worth of $100 par value preferred stock issued....
At December 31, 2020, Elkhart Corporation has $1,000,000 worth of $100 par value preferred stock issued. Each preferred share is convertible into 20 shares of Elkhart’s $1 par value common stock. The preferred stock was originally issued at $135 per share.
On March 1, 2021, half of the preferred shares were converted to common shares. At the time of the conversion, the market value of the common stock was $55 per share.
Record the conversion of the preferred stock. (4 points)
Homework Answers
Market Value of the common stock is irrelevant/ignored.
Where the value of common stock credited exceeds the par value of Preferred stock, the difference is debited to the Retained Earnings.(e.g., when each $100 preferred share is converted into 12 shares of face value $10 each)
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At December 31, 2020, Elkhart Corporation has $1,000,000 worth
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In 2017, Swifty Corporation, issued for $103 per share, 92500
shares of $100 par value convertible preferred stock. One share of
preferred stock can be converted into three shares of Swifty's $20
par value common stock at the option of the preferred stockholder.
In August 2018, all of the preferred stock was converted into
common stock. The market value of the common stock at the date of
the conversion was $25 per share. What total amount should be
credited to...
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preferred stock and 48,200 shares of $10 par value common stock
outstanding at December 31, 2020.
Answer the questions in each of the following independent
situations.
(a) If the preferred stock is cumulative and
dividends were last paid on the preferred stock on December 31,
2017, what are the dividends in arrears on December 31, 2020,
balance sheet?
The amount of dividends in
arrears on the December 31, 2020
$...
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