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Acct 221 Final Exam Answers

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ACCT 221   Final Exam Answers

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Question 1: 30% points:
On December 31, 2014, Frick Incorporated, had the following balances (all balances are normal):
Accounts Amount
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding) $1,000,000
Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding) $1,000,000
Paid-in Capital in Excess of par, Common 150,000
Retained Earnings 700,000
The following events occurred during 2014 and were not recorded:
a. On January 1, Frick declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share. Stock dividends were distributed on January 31 to shareholders as of January 25.
b. On February 15, Frick reacquired 1,000 shares of common stock for $20 each.
c. On March 31, Frick reissued 250 shares of treasury stock for $25 each.
d. On July 1, Frick reissued 500 shares of treasury stock for $16 each.
e. On October 1, Frick declared full year dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October 15.
f. One December 15, Frick split common stock 2 shares for 1.
g. Net Income for 2014 was $275,000.
Requirements:
a. Prepare journal entries for the transactions listed above.
b. Prepare a Stockholders’ section of a classified balance sheet as of December 31, 2014.
Common Stock 100,000.00
Stock Dividend 5%
Stock Dividend 5,000.00
Total No of common Stock 105,000.00
Preferred Stock 10,000.00
Par Value 100.00
Divivdend Rate 5%
Preference Dividend 50,000.00
Cash Dividends on Common Stock @1.5(105,000*1.5) 157,500.00
Total Dividend(50,000+157,500) 207,500.00
Retained Earnings 207,500.00
To Dividend Payable 207,500.00
Dividend Payable 207,500.00
To Cash 207,500.00
Question 2: 5% points:
On January 1, 2014, Frick Company purchased 10,000...

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