1. X Ltd has the following Stockholders' Equity as on December 31, 2012.

December 31, 2012

Common Stock , Taka 100 par, No of shares 30,000
30,00,000
6% Preferred stock , Taka 100 par, No of shares
10,00,000
10,000
Additional Paid in capital-Common stock
15,00,000
Additional Paid in capital-Preferred stock
12,00,000
Retained earnings
47,00,000
Company has following transactions regarding stock holders equity during the year
2013.
a. Issued 5000 common stock and 2000 preferred stock at a value of Taka
115 and Taka 118 respectively.
b. Issued 300 common stock and 200 preferred stock for a lump sum of taka
120,000. At the issue date market value of the stocks were Taka 220 and
Taka 230 respectively
c. Declare 40% stock dividend for common stock. At the date of declaration
market value of each stock was Taka 222.
d. Issued stock dividend.
e. Purchase 200 treasury stock of Taka 225 each
f. Reissue 150 treasury stocks at Taka 228 each.
g. 2 for 1 stock split
h. Reissue the rest 50 treasury stocks at Taka 12 each.
i. Declare 10% cash dividend for common stock and 8% for preferred stock.
j. Paid the cash dividend
k. During the year company made a profit of Taka 11,50,000.
Required: Provide the journal entries (explanations are not required) and prepare a
stockholders' equity section as on December 31, 2013.
2 .Prior to 2007 X Co has 500,000 common shares outstanding. During 2007 the
following transactions occurred:
Date
Events
January 1
Issued 50,000 common shares
February 1
Purchase 28,000 treasury shares
June 1
2 for 1 stock split.
August 1
Re-issue 10,000 treasury shares
Sept 1
Issued 10,000 common shares.
October 1
Issue stock dividend of 20%
Net income for 2007 was Taka15, 00,000. Compute basic earnings per share for 2007
3.Washington Company has the following stockholders equity accounts at December 31,
2012.
Common Stock ($100 par value, authorized 8,000 shares) $480,000
Retained Earnings
294,000
(a) Prepare entries in journal form to record the following transactions, which took place
during 2013.
(1) 280 shares of outstanding stock were purchased at $97 per share. (These are to be
accounted for
using the cost method.)
(2) A $20 per share cash dividend was declared.
(3) The dividend declared in (2) above was paid.
(4) The treasury shares purchased in (1) above were resold at $102 per share.
(5) 500 shares of outstanding stock were purchased at $105 per share.
(6) 350 of the shares purchased in (5) above were resold at $96 per share.
(b) Prepare the stockholders equity section of Washington Companys balance sheet after
giving effect to these transactions, assuming that the net income for 2013 was $94,000.
4. A portion of the statement of income and retained earnings of Pierson Inc. for the
current year follows.
1

Income before extraordinary item

Extraordinary loss, net of applicable income tax (Note 1)
Net income
Retained earnings at the beginning of the year
Dividends declared:
On preferred stock$6.00 per share $ 300,000
On common stock$1.75 per share 14,000,000
Retained earnings at the end of the year

$15,000,000
(1,340,000)
13,660,000
83,250,000
96,910,000
(14,300,000)
$82,610,000

Note 1. During the year, Pierson Inc. suffered a major casualty loss of $1,340,000 after
applicable income tax reduction of $1,200,000
At the end of the current year, Pierson Inc. has outstanding 8,000,000 shares of $10 par
common stock and 50,000 shares of 6% preferred. On April 1 of the current year, Pierson
Inc. issued 1,000,000 shares of common stock for $32 per share to help finance the
casualty.
Compute the earnings per share on common stock for the current year as it should be
reported to stockholders