Indira Lemana

ACC 151
Chapter 13
End-of-chapter Assignments

BE13.1
Advantages: 6. Corporation management—professional
1. Separate legal existence managers
2. Limited liability of stockholders Disadvantages:
3. Transferable ownership rights 1. Corporation management- separation of
4. Ability to acquire capital ownership and management
5. Continuous life 2. Government regulations
3. Additional taxes

BE13.3
May 10 Cash 36,000
Common Stock 20,000
Paid-in Capital in Excess of Par—Common Stock 16,000
(To record insurance of 1,000 shares of $1 par
common stock)

BE13.5
Land 75,000
Common Stock 50,000
Paid-in Capital in Excess of Par—Common Stock 25,000
(To record insurance of 5,000 shares of $10 par value
stock for land)

BE13.7
July 1 Treasury Stock 4,500
Cash 4,500
(To record the purchase of 500 shares at $9 per share)

Sep. 1 Cash 3,300

Treasury Stock 2,700
Paid-in Capital from Treasury Stock 600
(To record the sale of 300 shares of treasury stock at
$11 per share)

E13.1
1. True
2. True
3. True
4. True
5. False, corporations are taxed twice at the corporate level and again at the individual level
(double taxation).
6. False, creditors have no legal claim on the personal assets of the owners unless fraud has
occurred.
7. False, the transfer of an ownership interest in a partnership requires the consent of each
owner but not the transfer of stock.
 8. False, the stockholders legally own the corporation, The board of directors are elected to
manage the corporation.
9. True
10. False, they are subjected to numerous state and federal regulations.

E13.3
a.
Jan. 10 Cash 350,000
Common Stock 350,000
(To record insurance of 70,000 shares of $5 par
common stock at par)

July 1 Cash 280,000

Common Stock 200,000
Paid-in Capital in Excess of Par—Common Stock 80,000
(To record insurance of 40,000 shares of $7 par
common stock)

b.
Jan. 10 Cash 350,000
Common Stock 70,000
Paid-in Capital in Excess of Stated Value—Stock 280,000
(To record insurance of 70,000 shares of
no-par stock)
July 1 Cash 280,000
Common Stock 40,000
Paid-in Capital in Excess of Stated Value—Stock 240,000
(To record insurance of 40,000 shares of $7 stated
value no-par stock)

E13.5
March 2 Organization Expense 30,000
Common Stock 25,000
Paid-in Capital in Excess of Par—Common Stock 5,000
(To record insurance of 5,000 shares of $5
par value stock to attorneys)
June 12 Cash 375,000
Common Stock 300,000
Paid-in Capital in Excess of Par—Common Stock 42,000
(To record insurance of 60,000 shares of $5
par common stock)
July 11 Cash 110,000
Preferred Stock 100,000
Paid-in Capital in Excess of Par—Preferred Stock 10,000
(To record insurance of 1,000 shares of $100 par
value preferred stock)
Nov. 28 Treasury Stock 80,000
Cash 80,000
(To record the purchase of 2,000 shares for $80,000)
E13.7
a.
Mar. 1 Treasury Stock 750,000
Cash 750,000
(To record the purchase of 50,000 shares at $15 per share)
July 1 Cash 170,000
Treasury Stock 150,000
Paid-in Capital from Treasury Stock 20,000
(To record the sale of 10,000 shares of treasury stock
at $17 per share)
Sep. 1 Cash 112,000
Paid-in Capital from Treasury Stock 8,000
Treasury Stock 120,000
(To record sale of 8,000 shares of treasury stock
at $14 per share)

b.
Sep. 1 Cash 96,000
Paid-in Capital from Treasury Stock 24,000
Treasury Stock 120,000
(To record sale of 8,000 shares of treasury stock
at $12 per share)

P13.1
a.
Jan. 10 Cash 320,000
Common Stock 160,000
Paid-in Capital in Excess of Stated Value—Stock 160,000
(To record insurance of 80,000 shares of $4 stated
value no-par stock)
March 1 Cash 525,000
Preferred Stock 500,000
Paid-in Capital in Excess of Par—Preferred Stock 25,000
(To record insurance of 5,000 shares of $100 par
value preferred stock)
April 1 Land 85,000
Common Stock 48,000
Paid-in Capital in Excess of Stated Value—Stock 37,000
(To record insurance of 24,000 shares of $2 par
value common stock for land)
May 1 Cash 360,000
Common Stock 160,000
Paid-in Capital in Excess of Stated Value—Stock 200,000
(To record insurance of 80,000 shares of $4.50
par common stock)
Aug. 1 Organization Expense 30,000
Common Stock 20,000
Paid-in Capital in Excess of Stated Value—Stock 10,000
(To record insurance of 10,000 shares of $2
par value stock to attorneys)
Sept. 1 Cash 50,000
Common Stock 20,000
Paid-in Capital in Excess of Stated Value—Stock 30,000
(To record insurance of 10,000 shares of $5 stated
value no-par stock)
Nov. 1 Cash 109,000
Preferred Stock 100,000
Paid-in Capital in Excess of Par—Preferred Stock 9,000
(To record insurance of 1,000 shares of $100 par
value preferred stock)

b. Preferred Stock
Mar. 1 500,000
Nov. 1 100,000
Nov. 1 Bal. 600,000

Common Stock
Jan. 1 160,000
Apr. 1 48,000
May 1 160,000
Aug. 1 20,000
Sept. 1 20,000
Sept. 1 Bal. 408,000

Paid-in Capital in Excess of Par—Preferred Stock

Mar. 1 25,000
Nov. 1 90,000
Nov. 1 Bal. 34,000

Paid-in Capital in Excess of Stated Value—Common Stock

Jan. 10 160,000
Apr. 1 37,000
May 1 200,000
Aug. 1 10,000
Sept. 1 30,000
Sept. 1 Bal. 437,000
c.
DeLong Corporation
Balance Sheet (Partial)

Stockholders’ equity
Paid-in capital
Capital stock
Preferred stock $600,000
Common stock 408,000
Total capital stock $1,008,000
Additional paid-in capital
In excess of par—preferred stock 34,000
In excess of stated value—common stock 437,000
Total additional paid-in capital 471,000
Total stockholders’ equity $1,479,000

P13.3
a.
Feb. 1 Cash 120,000
Common Stock 25,000
Paid-in Capital in Excess of Stated Value—Stock 95,000
(To record insurance of 25,000 shares of $1
par common stock)
Apr. 14 Cash 33,000
Treasury Stock 30,000
Paid-in Capital from Treasury Stock 3,000
(To record the sale of 6,000 shares of treasury stock
at $5 per share)
Sept. 3 Patent 35,000
Common Stock 5,000
Paid-in Capital in excess of Stated Value—Stock 30,000
(To record the sale of 6,000 shares of treasury stock
at $5 per share)
Nov. 10 Treasury Stock 750,000
Cash 750,000
(To record the purchase of 1,000 shares at $5 per share)
Dec. 31 Income Summary 452,000
Retained Earnings 452,000
(To close Income Summary and transfer net
Income to Retained Earnings)
b.

Preferred Stock
Date Explanation Ref. Debit Credit Balance
Jan. 1 400,000

Common Stock
Date Explanation Ref. Debit Credit Balance
Jan. 1 1,000,000
Feb. 1 J5 25,000 1,025,000
Sep. 3 J5 5,000 1,030,000

Paid-in Capital in Excess of Par—Preferred Stock

Date Explanation Ref. Debit Credit Balance
Jan. 1 100,000

Paid-in Capital in Excess of Stated Value—Common Stock

Date Explanation Ref. Debit Credit Balance
Jan. 1 1,450,000
Feb. 1 J5 95,000 1,545,000
Sep. 3 J5 30,000 1,575,000

Paid-in Capital in from Treasury Stock

Date Explanation Ref. Debit Credit Balance
Apr. 14 J5 3,000 3,000

Retained Earnings
Date Explanation Ref. Debit Credit Balance
Jan. 1 1,817,000
Dec. 31 J5 452,000 2,268,000

Treasury Stock
Date Explanation Ref. Debit Credit Balance
Jan. 1 50,000
Apr. 14 J5 30,000 20,000
Dec. 1 J5 6,000 26,000
c.
Galindo Corporation
Balance Sheet (Partial)
December 31, 2022

Stockholders’ equity
Paid-in capital
Capital stock
8% preferred stock, $50 par value,
10,000 shares authorized, 8,000 issued outstanding $400,000
Common stock, no par, $1 stated value,
2,000,000 shares authorized, 1,030,0000 issued,
and 1,025,000 outstanding 1,030,000
Total capital stock 1,430,000
Additional paid-in capital
In excess of par—preferred stock $100,000
In excess of stated value—common stock 1,575,000
From treasury stock 3,000
Total additional paid-in capital 1,678,000
Total paid-in capital 3,108,000
Retained earnings 2,268,000
Total paid-in capital and retained earnings 5,376,000
Less: Treasury stock (5,000 common shares) (at cost) 26,000
Total stockholders’ equity $5,350,000

P13.5
Galindo Corporation
Balance Sheet (Partial)
December 31, 2022

Stockholders’ equity
Paid-in capital
Capital stock
8% preferred stock, $50 par value,
16,000 shares issued and outstanding $800,000
Common stock, no par, $5 stated value,
400,000 shares issued and 390,0000 outstanding 2,000,000
Total capital stock 2,800,000
Additional paid-in capital
In excess of par—preferred stock $679,000
In excess of stated value—common stock 1,600,000
From treasury stock 10,000
Total additional paid-in capital 2,289,000
Total paid-in capital 5,089,000
Retained earnings 1,748,000
Total paid-in capital and retained earnings 6,837,000
Less: Treasury stock (10,000 common shares) (at cost) 130,000
Total stockholders’ equity $6,707,000
QUIZ

1. True 6. True
2. True 7. False
3. True 8. True
4. False 9. True
5. False 10. True

11.
Feb. 12 Cash 32,000
Common Stock (2,000 × 6) 12,000
Paid-in Capital in Excess of Par—Common Stock 20,000
(To record insurance of 2,000 shares at
$16 per share)
12.
March 1 Cash 9,600
Common Stock (800 × 6) 4,800
Paid-in Capital in Excess of Par—Common Stock 4,800
(To record insurance of 800 shares at
$12 per share)

13.
Income Summary 260,000
Retained Earnings 260,000
(To close Income Summary and transfer net
Income to Retained Earnings)

14.
Land 100,000
Common Stock 80,000
Paid-in Capital in Excess of Par—Common Stock 20,000
(To record issuance of 10,000 shares of
$8 par value for land)

15.
May 26 Cash 56,000
Preferred Stock 16,000
Paid-in Capital in Excess of Par—Preferred Stock 40,000
(To record insurance of 2,000 shares of $8 par
value preferred stock)
16.
July 1 Cash 3,200
Paid-in Capital from Treasury Stock 1,600
Treasury Stock 4,800
(To record sale of 400 shares of treasury stock
below cost)
June 1 Cash 4,200
Treasury Stock 3,600
Paid-in Capital from Treasury Stock 3,600
(To record insurance of 300 shares of treasury
Stock above cost)

17.
May 26 Cash 63,000
Common Stock 35,000
Paid-in Capital in Excess of Stated Value—Common Stock 40,000
(To record insurance of 7,000 shares of $5 stated
value no-par stock)