ACC 304 help A Guide to career/Snaptutorial ACC 304 help A Guide to career/Snaptutorial | Page 159

amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the amounts.)
5) Shown below is the liabilities and stockholders’ equity section
of the balance sheet for Jana Kingston Company and Mary Ann
Benson Company. Each has assets totaling $4,517,200.
Jana Kingston Co.
Mary Ann Benson Co.
Current liabilities
$315,000
Current
liabilities
$815,000
Long-term debt, 8%
1,306,000
Common stock
($20 par)
2,990,000
Common stock ($20 par)
2,184,000
Retained
earnings (Cash dividends, $327,900)
712,200
Retained earnings (Cash dividends, $226,100)
712,200
$4,517,200
$4,517,200
For the year, each company has earned the same income before
interest and taxes.
Jana Kingston Co.
Mary Ann Benson Co.
Income before interest and taxes
$1,213,000
$1,213,000
Interest expense
104,480
0
1,108,520
1,213,000
Income taxes (45%)
498,834
545,850
Net income
$609,686
$667,150
At year end, the market price of Kingston’s stock was $101 per share,
and Benson’s was $63.50. Assume balance sheet amounts are
representative for the entire year.
6) Hatch Company has two classes of capital stock outstanding:
8%, $20 par preferred and $5 par common. At December 31, 2014,
the following accounts were included in stockholders’ equity.
Preferred Stock, 156,500 shares
$ 3,130,000
Common Stock, 2,083,000 shares
10,415,000
Paid-in Capital in Excess of Par—Preferred Stock
201,400