Agrees to pay an amount for medical insurance equal to $10,000. Declared a 2% st
ID: 2488802 • Letter: A
Question
Agrees to pay an amount for medical insurance equal to $10,000. Declared a 2% stock dividend, when the stock was selling for $10 per share. Pay cash dividend to stockholders of record on October 28. Distributed the stock dividend to stockholders from October 30. Sold 200 shares of its treasury stock lor $8 per share. Received from trading investment annual interest of $2,000. Purchase some adjacent land for expansion. In lieu of paying cash for tho land, the company issues to Deed land Company 7,000 shares of common stock (par value $6) that have a fair value of $25 per sharo. The Corp had to sell a plant located on company property that stood directly in the path of an interstate highway. For a number of years, the state had sought to purchase the land on which the plant stood, but the company resisted. The state ultimately exercised its right of eminent domain, which the courts upheld. In settlement. Camel received $300,000. The book value of the plant and land (cost of $500,000 less accumulated depreciation of $200,000).Explanation / Answer
FICA Taxes Payable (5.67%)
Date Accounts Titles Debit $ Credit $ 30 Insurance Expense 10000 Insurance Payable 10000 31 Retained Earnings Common Stock Paid in capital in excess of par (2% of the outstanding common stock capital) 31 Cash Dividend Cash 31 Common stock distributable Common Stock 31 Treasury Stock 10000 Cash 10000 31 cash 1600 Loss on reissue of treasury stock 400 Treasury Stock 2000 31 Cash 2000 Investment Income 2000 31 Land 42000 Common Stock 42000 31 Payroll Taxes Expense 543.60FICA Taxes Payable (5.67%)
170.10 Medicare Payable(7.65%) 229.50 Federal Unemployment Taxes Payable (0.80%) 24 State Unemployment Taxes Payable (4%) 120