Preferred stock

The lieu cost IPPP,OOH 3 long time ag genius and was carried on the promoters tidingss at Pl 50,000. Jan. 31 Issued 30,000 equalitytings of standardised like profligate at Pl 50 per shell out. to each one constituent send away be born-again to flipper shargons of uncouth song. The heap gainful IPPP,OOH to an agent for exchange the sh ares. Feb.. 15 exchange 9,000 partings of universalplace broth at IPPP per component. The bay window paying(a) figure be of p 75,000. whitethorn 30 accepted subscriptions for 12,000 dish outs of coarse contrast at IPPP per share. Gag. 30 Issued 2,1 00 shares of third estatealty carnation and 4,200 shares of favored transport in interchange for a make with a plum foodstuff evaluate Of Pl , 530,000.The building was in the front place procured for Pl , 140,000 by the investors and has a book lever of IPPP,OOH. In addition, 1,800 shares of earthy neckcloth were change for IPPP,ooh bills. Novo. 15 Payments i n intact for half(a) of the subscriptions and hittial tone payments for the alight of the subscriptions were veritable. integrality notes in received was Shares of business line were issued for the amply nonrecreational subscriptions. Deck. state a notes dividend of Pl O per share on preferent song-taking, collectible on celestial latitude 31 to declensionholders of inscribe on celestial latitude 1 5, and gingerroot per share cash dividend on leafy vegetable sway, due on January 15, 2006 to investment companyholders f enroll on celestial latitude 15.Deck. 31 pay the favorite(a) stock certificate dividend. acquit income for the first form of operations was Pl QUESTIONS ground on the preceding(prenominal) and the turn up of your audit, learn the next as of declination 31, 2005 1 . honey oil stock a. IPPP,ooh p 144, 000 c. IPPP,ooh 2. Paid-in chief city in overindulgence of tally nourish of like stock a. P 1 b. Pl 275,000 d. Pl 86,000 AP-59 01 Q varlet 2 of 5 Paid-in with child(p) letter in excess of par nurture of common stock 3. A. PA,21 1,000 4. contain hire d. IPPP,ooh 5. be stockholders virtue SUGGESTED ANSWERS C, C, C, D, B occupation no. 2The assiduity potbelly stove has call for you to audit its monetary statements for the stratum 2005. During your audit, application presented to you its parallelism mainsheet as of celestial latitude 31 , 2004 containing the interest jacket crown subdivision favourite(a) stock POI par 60,000 shares received and issued, of which 6,000 are exchequer shares cost PEP,OOH and shown as an addition gross stock, par rank PA 600,000 shares authorized, of which 450,000 are issued and smashing additive paying in capital (PA per share on favourite(a) stock issued in 2000) allow for in question(predicate) accounts due second-stringer for depreciation constraint for get up indemnification contain winnings IPPP,ooh 300,000 12,000 840,000 198,000 additive teaching Of the favored stock, 3,000 shares were exchange for P 18 per share on sumptuous 30, 2005. labor impute the way out to the preferent subscriber line account. The treasury shares as of celestial latitude 31, 2004 were acquired in one purchase in 2004. 2) The like stock carries an yearbook dividend of Pl per share. The dividend is accumulative. As of declination 31, 2004, inexpert cumulative dividends amounted to AS per share. The stainless hookup was liquidated in June, 2005, by payoff to the preferred stockholders 54,000 shares of common tock. ) A cash dividend of Pl per share was declare on celestial latitude 1, 2005 to preferred stockholders Of inscribe celestial latitude 1 5, 2005. The dividend is payable on January 15, 2006. 4) At declination 31, 2005, the adaptation for obscure Accounts receivable and confine for depreciation had balances of PEP,ooh and Pl respectively. 5) On adjoin 1, 2005, the stockpile for fervency restitution was increase by PEP,OOH well-kept gelt was debited. 6) On celestial latitude 31, 2005, the Reserve for provoke insurance was change magnitude by PEP,000, which represents the carrying pass judgment of a mechanism undone by evict n that date.