CHAPTER 11

Corporations: Organization, Stock Transactions,

and Stockholders’ Equity

SOLUTIONS TO EXERCISES

EXERCISE 11.3

(a) Jan. 10 Cash (30,000 × $5) ................................ 150,000

Common Stock .............................. 150,000
July 1 Cash (60,000 × $7) ................................ 420,000
Common Stock (60,000 × $5)........ 300,000
Paid-in Capital in Excess of Par—
Common Stock
(60,000 × $2) ............................... 120,000
(Common stk. = No. of shs. issued × Par value per sh.)
(July 1: $300,000 = 60,000 × $5)

(b) Jan. 10 Cash (30,000 × $5) ................................ 150,000

Common Stock (30,000 × $1)........ 30,000
Paid-in Capital in Excess of
Stated Value—Common Stock
(30,000 × $4) ............................... 120,000
July 1 Cash (60,000 × $7) ................................ 420,000
Common Stock (60,000 × $1)........ 60,000
Paid-in Capital in Excess of
Stated Value—Common Stock
(60,000 × $6) ............................... 360,000
(Common stk. = No. of shs. issued × Stated value per sh.)
(July 1: $60,000 = 60,000 × $1)
LO 2 BT: AP Difficulty: Easy TOT: 8 min. AACSB: Analytic AICPA FC: None AICPA BB: None IMA: Reporting
EXERCISE 11.4

(a) Cash .......................................................................... 52,000

Common Stock (2,000 × $5) ............................. 10,000
Paid-in Capital in Excess of Par—
Common Stock.............................................. 42,000

(b) Cash ...................................................................... 52,000

Common Stock (2,000 × $5) ......................... 10,000
Paid-in Capital in Excess of Stated
Value—Common Stock............................. 42,000

(c) Cash .......................................................................... 52,000

Common Stock.............................................. 52,000

(d) Organization Expense ......................................... 52,000

Common Stock (2,000 × $5) ......................... 10,000
Paid-in Capital in Excess of Par—
Common Stock.......................................... 42,000

(e) Land ...................................................................... 52,000

Common Stock (2,000 × $5) ......................... 10,000
Paid-in Capital in Excess of Par—
Common Stock.......................................... 42,000
LO 2 BT: AP Difficulty: Moderate TOT: 10 min. AACSB: Analytic AICPA FC: None AICPA BB: None IMA: Reporting

11-2 © 2020 John Wiley & Sons, Inc. All rights reserved. Weygandt, Financial Accounting 11e, Solutions Manual (For Instructor Use Only)
EXERCISE 11.5

(a) 2021
Jan. 1 Cash ....................................................... 2,300,000
Preferred Stock (100,000 × $20)..... 2,000,000
Paid-in Capital in Excess of Par—
Preferred Stock .......................... 300,000

(b) Total Dividend ........................................................ $ 500,000

Less: Preferred Stock Dividend
($2,000,000 × 6%) ........................................ 120,000
Common Stock Dividend ....................................... $ 380,000
(Com. stk. div. = Tot. div. – Pref. stk. div.); [$500,000 – (100,000 × $20 × 6%)]

(c) Total Dividend ........................................................ $ 500,000

Less: Preferred Stock Dividend
[($2,000,000 × 6%) × 3] ............................... 360,000
Common Stock Dividends ..................................... $ 140,000
(Com. stk. div. = Tot. div. – Div. in arrears – Current yr.’s pref. stk. div.); [$500,000 – (100,000 × $20 × 6% × 2) – (100,000 × $20 ×
6%)]
LO 2, 3 BT: AP Difficulty: Moderate TOT: 10 min. AACSB: Analytic AICPA FC: None AICPA BB: None IMA: Reporting
EXERCISE 11.8

Mar. 2 Organization Expense .................................. 30,000

Common Stock (5,000 × $5) .................. 25,000
Paid-in Capital in Excess of Par—
Common Stock .................................. 5,000

June 12 Cash ............................................................... 375,000

Common Stock (60,000 × $5) ................ 300,000
Paid-in Capital in Excess of Par—
Common Stock .................................. 75,000

July 11 Cash (1,000 × $110) ....................................... 110,000

Preferred Stock (1,000 × $100).............. 100,000
Paid-in Capital in Excess of Par—
Preferred Stock (1,000 × $10)............ 10,000

Nov. 28 Treasury Stock .............................................. 80,000

Cash ....................................................... 80,000
LO 2 BT: AP Difficulty: Easy TOT: 8 min. AACSB: Analytic AICPA FC: None AICPA BB: None IMA: Reporting

EXERCISE 11.16

1. Dec. 31 Cash Dividends ............................... 50,000

Interest Expense ..................... 50,000

2. 31 Stock Dividends .............................. 8,000

Dividends Payable .......................... 10,000
Common Stock Dividends
Distributable ........................ 10,000
Paid-in Capital in Excess
of Par—Common Stock ...... 8,000

3. 31 Common Stock ............................... 2,000,000

Retained Earnings ................... 2,000,000
LO 3 BT: AP Difficulty: Moderate TOT: 7 min. AACSB: Analytic AICPA FC: None AICPA BB: None IMA: Reporting

11-4 © 2020 John Wiley & Sons, Inc. All rights reserved. Weygandt, Financial Accounting 11e, Solutions Manual (For Instructor Use Only)
EXERCISE 11.17

Retained Earnings balance, January 1, 2022……….. $610,000

Add: Net income………………………………………... 350,000
960,000
Less: Cash dividends………………………………….. $120,000
Stock dividends………………………………… 90,000 210,000
Retained Earnings balance, December 31, 2022…. $750,000
LO 4 BT: AP Difficulty: Easy TOT: 5 min. AACSB: Analytic AICPA FC: Reporting AICPA BB: None IMA: Reporting