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 IFRS 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. Required: 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). Required: 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.) Transactions ·   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) ·  .

1. 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

2. IFRS
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.
Required:
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).

3. Required:
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.)
Transactions
· N 1. Sale of common stock
· 2. Purchase of treasury stock at a cost
less

4. 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

5. · 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