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2. (TCO D) Yates Co. began operations on January 2, 2010. It employs 15 people who work eight-hour days.? Each employee earns ten paid vacation days annually. Vacation days may be taken after January 10 of the year following the year in which they are earned. The average hourly wage rate was $24.00 in 2010 and $25.50 in 2011. The average vacation days used by each employee in 2011 was 9. Yates Co. accrues the cost of compensated absences at rates of pay in effect when earned. InstructionsPrepare journal entries to record the transactions related to paid vacation days during 2010 and 2011.2010Wages Expense28,800 (1)Vacation Wages Payable28,800(1) 15 × 8 × $24.00 = $2,880; $2,880 × 10 = $28,800.2011Wages Expense1,620Vacation Wages Payable25,920 (2)Cash27,540 (3)Wages Expense30,600 (4)Vacation Wages Payable30,600(2) $2,880 × 9 = $25,920.(3) 15 ? 8 ? $25.50 = $3,060; $3,060 ? 9 = $27,540.(4) $3,060 ? 10 = $30,600.4.?(TCO E) Parker Corporation has issued 2,000 shares of common stock and 400 shares of preferred stock for a lump sum of $72,000 cash. Instructions(a)?Give the entry for the issuance assuming the par value of the common was $5 and the market value $30, and the par value of the preferred was $40 and the market value $50. (Each valuation is on a per share basis and there are ready markets for each stock.)(b)?Give the entry for the issuance assuming the same facts as (a) above except the preferred stock has no ready market value, and the common stock has a market value of $25 per share.(Points: 30)’(a)Cash72,000Common Stock 10,000Paid-in Capital in Excess of Par—Common44,000Preferred Stock 16,000Paid-in Capital in Excess of Par—Preferred 2,000(common $30 × 2,000$60,000preferred $50 × 400 20,000$80,000market value60/80 × $72,000 =$54,000common20/80 × $72,000 = 18,000preferred$72,000)(b)Cash72,000Common Stock10,000Paid-in Capital in Excess of Par—Common40,000Preferred Stock16,000Paid-in Capital in Excess of Par—Preferred6,0005.?(TCO F) In each of the following independent cases, it is assumed that the corporation has $400,000 of 6% preferred stock and $1,600,000 of common stock outstanding, each having a par value of $10.? No dividends have been declared for 2009 and 2010. (a)?As of 12/31/11, it is desired to distribute $250,000 in dividends. How much will the preferred stockholders receive if their stock is cumulative and nonparticipating?(b)?As of 12/31/11, it is desired to distribute $400,000 in dividends. How much will the preferred stockholders receive if their stock is cumulative and participating up to 11% in total?(c)?On 12/31/11, the preferred stockholders received a $120,000 dividend on their stock which is cumulative and fully participating. How much money was distributed in total for dividends during 2011?(a)$72,000 ($400,000 x .06 x 3 yrs.).(b)$92,000 ($400,000 x .06 x 3 yrs.) + [$400,000 x (.11 -.06)].(c)$408,000 ($288,000* to common and $120,000 to preferred).* ($1,600,000 x .06) + [($120,000 - $72,000) ÷ $400,000) x $1,600,000].7.?(TCO B)? Agee Corp. acquired a 25% interest in Trent Co. on January 1, 2010, for $500,000. At that time, Trent had 1,000,000 shares of its $1 par common stock issued and outstanding. During 2010, Trent paid cash dividends of $160,000 and thereafter declared and issued a 5% common stock dividend when the market value was $2 per share. Trent's net income for 2010 was $360,000. What is the balance in Agee’s investment account at the end of 2010? (Points: 30)Cost$500,000Share of net income (.25 × $360,000)90,000Share of dividends (.25 × $160,000) (40,000)Balance in investment account$550,000 ................
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