In Late 2020, The Nicklaus Corporation Was Formed. The Corporate Charter Authorizes The Issuance of
In Late 2020, The Nicklaus Corporation Was Formed. The Corporate Charter Authorizes The Issuance of
In Late 2020, The Nicklaus Corporation Was Formed. The Corporate Charter Authorizes The Issuance of
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03/20/2021 • Business • College
Part B
During 2021, the Nicklaus Corporation participated in three treasury stock transactions:
On June 30, 2021, the corporation reacquires 250,000 shares for the treasury at a
price of $12 per share.
On July 31, 2021, 25,000 treasury shares are reissued at $15 per share.
On September 30, 2021, 25,000 treasury shares are reissued at $10 per share.
Required:
1. Prepare journal entries to record these transactions.
2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in
a balance sheet prepared at September 30, 2021. (Assume net income for the second
and third quarter was $3,250,000.)
Part C
On October 1, 2021, Nicklaus Corporation receives permission to replace its $1 par
value common stock (6,000,000 shares authorized, 4,000,000 shares issued, and
3,800,000 shares outstanding) with a new common stock issue having a $0.50 par
value. Since the new par value is one-half the amount of the old, this represents a 2-
for-1 stock split. That is, the shareholders will receive two shares of
Askthe
your $0.50
question par stock
in exchange for each share of the $1 par stock they own. The $1 par stock will be
collected and destroyed by the issuing corporation.
On November 1, 2021, the Nicklaus Corporation declares a $0.18 per share cash
dividend on common stock and a $0.35 per share cash dividend on preferred stock.
Payment is scheduled for December 1, 2021, to shareholders of record on November
15, 2021.
Required:
1. Prepare journal entries to record the declaration and payment of these stock and
cash dividends.
2. Prepare the December 31, 2021, shareholders' equity section of the balance sheet
for the Nicklaus Corporation. (Assume net income for the fourth quarter was
$2,750,000.)
3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021.
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Nicklaus Corporation
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