Accounting unit10 | Accounting homework help


After reading the information on stockholder’s equity in Chapter 18 from your Intermediate Accounting text, use a Word or an Excel document to address the following problems:

  • P 18-1, “Various Stock      Transactions; Correction of Journal Entries,” page 1078.
    • This problem tests your       knowledge on the issuance of capital stock and correction of journal       entries for stockholders’ equity.
  • P 18-10, “Transactions      Affecting Retained Earnings,” page 1082.
    • This problem tests your       knowledge of transactions affecting retained earnings.

P 18–1
Various stock transactions; correction of journal entries

• LO18–4


Part A

During its first year of operations, the McCollum Corporation entered into the following transactions relating to shareholders’ equity. The corporation was authorized to issue 100 million common shares, $1 par per share.


Prepare the appropriate journal entries to record each transaction.


Jan. 9

Issued 40 million   common shares for $20 per share.


Mar. 11

Issued 5,000 shares in   exchange for custom-made equipment. McCollum’s shares have traded recently on   the stock exchange at $20 per share.

Part B

A new staff accountant for the McCollum Corporation recorded the following journal entries during the second year of operations. McCollum retires shares that it reacquires (restores their status to that of authorized but unissued shares).


Prepare the journal entries that should have been recorded for each of the transactions.

P 18–10
Transactions affecting retained earnings

• LO18–4 through LO18–8

Indicate by letter whether each of the transactions listed below increases (I), decreases (D), or has no effect (N) on retained earnings. Assume the shareholders’ equity of the transacting company includes only common stock, paid-in capital—excess of par, and retained earnings at the time of each transaction. (Some transactions have two possible answers. Indicate both.)




·   N    1.   Sale of common stock

·    2.   Purchase of treasury stock at a cost less than the original   issue price

·    3.   Purchase of treasury stock at a cost greater than the   original issue price

·    4.   Declaration of a property dividend

·    5.   Sale of treasury stock for more than cost

·    6.   Sale of treasury stock for less than cost

·    7.   Net income for the year

·    8.   Declaration of a cash dividend

·    9.   Payment of a previously declared cash dividend

·   10.   Issuance of convertible bonds for cash

·   11.   Declaration and distribution of a 5% stock dividend

·   12.   Retirement of common stock at a cost less than the original   issue price

·   13.   Retirement of common stock at a cost greater than the   original issue price

·   14.   A stock split effected in the form of a stock dividend

·   15.   A stock split in which the par value per share is reduced (not effected in   the form of a stock dividend)

·   16.   A net loss for the year

Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.