For this exam, omit all general journal entry explanations. Ensure to include correct dollar signs, underlines & double underlines. Question1: 30% points: On December 31, 2014, Flimsy Incorporated, had the following balances (all balances are normal): Accounts Amount Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding) $1,000,000 Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding) $1,000,000 Paid-in Capital in Excess of par, Common 150,000 Retained Earnings 700,000 The following events occurred during 2014 and were not recorded: a. On January 1, Flimsy declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share. Stock dividends were distributed on January 31 to shareholders as of January 25. b. On February 15, Flimsy reacquired 1,000 shares of common stock for $20 each. c. On March 31, Flimsy reissued 250 shares of treasury stock for $25 each. d. On July 1, Flimsy reissued 500 shares of treasury stock for $16 each. e. On October 1, Flimsy declared full year dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October 15. f. One December 15, Flimsy split common stock 2 shares for 1. g. Net Income for 2014 was $275,000. Requirements: a. Prepare journal entries for the transactions listed above. b. Prepare a Stockholders\' section of a classified balance sheet as of December 31, 2014. Ensure to include correct dollar signs, underlines & double underlines. Date Account Debit Credit Comment Accounts Amount Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding) $1,000,000 Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding) $1,000,000 Paid-in Capital in Excess of par, Common 150,000 Retained Earnings 700,000 Solution Journal entries: Date Accounts Title Debit $ Credit $ Jan. 1 Retained Earnings (100000 Shares x 5%x$15) 75,000.00 Dividend Distributable (100000 Shares× 5%x$15) 75,000.00 (Being Stock Dividend Declared) Jan. 31 Dividend Distributable 75,000.00 Paid-in Capital in Excess of par, Common (100,000 Shares x5%x($15- $10) 25,000.00 Common Stock (100000 Shares ×5%x$10) 50,000.00 (Being Stock Dividend Distributed) Feb. 15 Treasury Stock 20,000.00 Cash (1,000x$20) 20,000.00 (Being 1000 Shares required) Mar. 31 Cash (250 Sharesx$25) 6,250.00 Paid-in Capital in Excess of par, Common (250 Shares x ($25-20) 1,250.00 Treasury Stock (250 Shares x $20) 5,000.00 Rissued 250 shares of treasury stock for $25 each) Jul. 1 Cash (500 Shares x $16) 8,000.00 Paid-in Capital in Excess of par, Common (500 Shares x ($20-16) 2,000.00 Treasury Stock (500 Shares x$20) 10,000.00 (To record the issued 500 shares of treasury stock for $16 each) Oct. 1 Reatined Earnings 199,625.00 Dividend Distributable (50,000+149,625) 199,625.00 (To record the Dividend Declared) Pref.

1. For this exam, omit all general journal entry explanations.
Ensure to include correct dollar signs, underlines & double underlines.
Question1: 30% points:
On December 31, 2014, Flimsy Incorporated, had the following balances (all balances are
normal):
Accounts
Amount
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares
issued and outstanding)
$1,000,000
Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and
outstanding)
$1,000,000
Paid-in Capital in Excess of par, Common
150,000
Retained Earnings
700,000
The following events occurred during 2014 and were not recorded:
a. On January 1, Flimsy declared a 5% stock dividend on its common stock when the
market value of the common stock was $15 per share. Stock dividends were distributed on
January 31 to shareholders as of January 25.
b. On February 15, Flimsy reacquired 1,000 shares of common stock for $20 each.
c. On March 31, Flimsy reissued 250 shares of treasury stock for $25 each.
d. On July 1, Flimsy reissued 500 shares of treasury stock for $16 each.
e. On October 1, Flimsy declared full year dividends for preferred stock and $1.50 cash
dividends for outstanding shares and paid shareholders on October 15.
f. One December 15, Flimsy split common stock 2 shares for 1.
g. Net Income for 2014 was $275,000.
Requirements:
a. Prepare journal entries for the transactions listed above.
b. Prepare a Stockholders' section of a classified balance sheet as of December 31, 2014.
Ensure to include correct dollar signs, underlines & double underlines.
Date
Account
Debit

2. Credit
Comment
Accounts
Amount
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares
issued and outstanding)
$1,000,000
Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and
outstanding)
$1,000,000
Paid-in Capital in Excess of par, Common
150,000
Retained Earnings
700,000
Solution
Journal entries:
Date
Accounts Title
Debit $
Credit $
Jan. 1
Retained Earnings (100000 Shares x 5%x$15)
75,000.00
Dividend Distributable (100000 Shares× 5%x$15)
75,000.00
(Being Stock Dividend Declared)
Jan. 31
Dividend Distributable
75,000.00
Paid-in Capital in Excess of par, Common (100,000 Shares x5%x($15- $10)
25,000.00
Common Stock (100000 Shares ×5%x$10)
50,000.00
(Being Stock Dividend Distributed)

3. Feb. 15
Treasury Stock
20,000.00
Cash (1,000x$20)
20,000.00
(Being 1000 Shares required)
Mar. 31
Cash (250 Sharesx$25)
6,250.00
Paid-in Capital in Excess of par, Common (250 Shares x ($25-20)
1,250.00
Treasury Stock (250 Shares x $20)
5,000.00
Rissued 250 shares of treasury stock for $25 each)
Jul. 1
Cash (500 Shares x $16)
8,000.00
Paid-in Capital in Excess of par, Common (500 Shares x ($20-16)
2,000.00
Treasury Stock (500 Shares x$20)
10,000.00
(To record the issued 500 shares of treasury stock for $16 each)
Oct. 1
Reatined Earnings
199,625.00
Dividend Distributable (50,000+149,625)
199,625.00
(To record the Dividend Declared)
Preference Dividend = 1000000xx5%= 50000
Common Dividend =(100000 -1000+250+500)Shares x $1.50 = $149625
Oct. 15
Dividend Distributable
199,625.00
Cash
$199,625.00
(To record the Dividend Paid)

4. Stock Split:
Dec. 15
Number of common share before Stock Split
100,000.00
Number of common share after Stock Split = 100000x2
200,000.00
b.
Stockholders’ section of a classified balance sheet as of December 31, 2014
Stockholders' section of a classified balance sheet as of December 31, 2014
Accounts
Amount $
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares
issued and outstanding)
$1,000,000.00
Common Stock ($5 par value, 400,000 shares authorized, 200000 shares issued and outstanding)
$1,997,500.00
Paid-in Capital in Excess of par, Common (150000+25000+1250-2000)
174,250.00
Retained Earnings (700000-75000-199625)
425,375.00
Less: Treasury Stock (1000-250-500)x20
5,000.00
Total Stock Holders Equity
$3,602,125.00
Date
Accounts Title
Debit $
Credit $
Jan. 1
Retained Earnings (100000 Shares x 5%x$15)
75,000.00
Dividend Distributable (100000 Shares× 5%x$15)
75,000.00
(Being Stock Dividend Declared)
Jan. 31
Dividend Distributable

5. 75,000.00
Paid-in Capital in Excess of par, Common (100,000 Shares x5%x($15- $10)
25,000.00
Common Stock (100000 Shares ×5%x$10)
50,000.00
(Being Stock Dividend Distributed)
Feb. 15
Treasury Stock
20,000.00
Cash (1,000x$20)
20,000.00
(Being 1000 Shares required)
Mar. 31
Cash (250 Sharesx$25)
6,250.00
Paid-in Capital in Excess of par, Common (250 Shares x ($25-20)
1,250.00
Treasury Stock (250 Shares x $20)
5,000.00
Rissued 250 shares of treasury stock for $25 each)
Jul. 1
Cash (500 Shares x $16)
8,000.00
Paid-in Capital in Excess of par, Common (500 Shares x ($20-16)
2,000.00
Treasury Stock (500 Shares x$20)
10,000.00
(To record the issued 500 shares of treasury stock for $16 each)
Oct. 1
Reatined Earnings
199,625.00
Dividend Distributable (50,000+149,625)
199,625.00
(To record the Dividend Declared)
Preference Dividend = 1000000xx5%= 50000
Common Dividend =(100000 -1000+250+500)Shares x $1.50 = $149625

6. Oct. 15
Dividend Distributable
199,625.00
Cash
$199,625.00
(To record the Dividend Paid)
Stock Split:
Dec. 15
Number of common share before Stock Split
100,000.00
Number of common share after Stock Split = 100000x2
200,000.00