|Perfect Number of Pages to Order||5-10 Pages|
Extra Credit Homework Assignment (Due on July 30)?
3. On January 1, 2017, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 80,000 shares of $10 par value common stock. It then completed these transactions.
On 1/11/17, issued 20,000 shares of common stock at $16 per share.?
On 5/1/17, declared and issued a 10% stock dividend when the market price of the common stock is $14.?
On 6/1/17, repurchased 1,000 shares of common stock at $17 per share. (use cost method)
On 8/1/17, sold the 500 treasury shares at $14 per share.?
On 12/1/17, declared but not yet issued a 40% stock dividend when the market price of the common stock is $14.?
On 12/31/17, A 2-for-1 split of the common stock is effective on this date.?
On 12/31/17, the balance of accumulated other comprehensive income is $5,000.?
In 2017, Phelps Corporation adopted a stock option plan for top executives whereby each might receive rights to purchase up to 10,000 shares of common stock at $30 per share. The options were granted to each of five executives on the same day. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 1/1/18. It is assumed that the options were for services performed equally in 2017 and 2018 (period of benefit). The Black-Scholes option pricing model determines total compensation expense to be $130,000.
Answer is as follows (We will cover in the chapter 16):?
Compensation Expense 65,000
Paid-in CapitalStock Options 65,000
(a) Record the journal entries and adjusting entries needed at the end of year for the transactions listed above.?
(b) Prepare the stockholders equity section of Phelps Corporations balance sheet as of December 31, 2017. Assume the beginning balance of retained earnings is $100,000 and net income for the year is $250,000.?