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During 2005, Brad Co. issued 5,000 shares of $100 par
convertible preferred stock for $110 per share. One share of
preferred stock can be converted into three shares of Brad's
$25 par common stock at the option of the preferred
shareholder. On December 31, 2006, when the market value of
the common stock was $40 per share, all of the preferred stock
was converted. What amount should Brad credit to Common
Stock and to Additional Paid-in Capital -- Common Stock as a
result of the conversion?
Question 15
A company declared a cash dividend on its common stock on
December 15, 2003, payable on January 12, 2004. How would
this dividend affect stockholders' equity on the following
dates?
Question 16
Beck Corp. issued 200,000 shares of common stock when it
began operations in 2003 and issued an additional 100,000
shares in 2004. Beck also issued preferred stock convertible to
100,000 shares of common stock. In 2005, Beck purchased
75,000 shares of its common stock and held it in Treasury. At
December 31, 2005, how many shares of Beck's common stock
were outstanding?
Question 17
On January 2, 2005, Nast Co. issued 8% bonds with a face
amount of $1,000,000 that mature on January 2, 2011. The
bonds were issued to yield 12%, resulting in a discount of