Account assignment | business | canadian college

1.  For each of the following independent situations, present the necessary journal entry:

(a) Declared and distributed a 5% share dividend on 100,000 shares of common shares outstanding. Market price per share on this date was $12.

(b) With 250,000 shares of common shares outstanding, declared and distributed a 2 for 1 share split.

(c) Declared and distributed a 20% share dividend on 100,000 shares of common shares outstanding. Market price per share on this date was $11.

                                                                                                                                                                              10

2. Diego Corp received its charter and began business in 2020. The company was authorized to issue 20,000, $5, noncumulative preferred shares and an unlimited number of common shares. Prepare journal entries to record the following transactions that occurred during 2020:

Sep-01 Honoured a $55,000, 12%, 120 note payable, in exchange for 800 preferred shares.

Oct-12 Sold 1,500 preferred shares for $70 per share, cash.

Nov-03 Sold 2,000 common shares at $22 per share.

                                                                                                                                                                                 10

3. The partners of the Blue Tooth Partnership agree to liquidate. After all liabilities of $100,000 are paid, the capital account balances are: Wong, $80,000; Winslow, $70,000; and Peters, ($4,000). Prepare the journal entries required to end the partnership in the following situations:

a. Peters agrees to pay $4,000 in cash to settle his deficiency.                                                                         5

b. Peters is unable to pay his capital deficiency                                                                                                    5

4. Write Short notes on the following:                   

  a. Stock Split                                                                                                                                                       5

  b. Preferred Share                                                                                                                                             5

  c. Accounting Information System                                                                                                                   5

5. Ms. X plans to leave the JT Partnership. At this time her capital account is $48,000. The remaining partners, Ms. Y and Ms. Z, agree to pay Ms. X $58,000. Prepare the journal entry to record the withdrawal. Assume the partners have no agreement for sharing profits and losses.                                                        5

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