3. Mercer Corporation has 200,000 shares of $10 stated value no-par common stock authorized, and 160,000 shares were outstanding during 20x7. The following transactions relate to cash dividends of Mercer Corporation for the year ended December 31, 20x7. Prepare entries in journal form without explanations to record the following transactions:
June 1 Declared a semiannual cash dividend of $0.50 per common share.
15 Compiled the list of individual shareholders eligible for the dividend declared on June 1.
July 5 Paid the dividend declared on June 1.
Dec. 1 Declared a semiannual cash dividend of $0.50 per common share to be paid on January 5, 20x8.
15 Compiled the list of individual shareholders eligible for the dividend declared on December 1.
31 Closed the Dividends account at year end.
4. On January 1, 20x7, Hilary Corporation acquired 100 percent of the common stock of Gooden Corporation for $3,250,000. At the date of acquisition, Gooden Corporation reported total assets of $4,200,000, liabilities of $1,200,000, common stock of $2,200,000, and retained earnings of $800,000 on its balance sheet. An appraisal on the acquisition date showed that the fair value of Gooden's net identifiable assets was equal to their book value. Prepare the eliminating entry in journal form that would appear on the work sheet for consolidating the balance sheets of the two companies as of the acquisition date.
5. Kappa Corporation had a taxable income of $69,000 for 20xx. Calculate the income taxes expense of Kappa Corporation on the basis of the following tax schedule:
Tax Rate Schedule
Taxable Income Tax Liability
Over But Not Over Of the Amount Over
— $50,000 0 + 15% —
$ 50,000 75,000 $ 7,500 + 25% $ 50,000
75,000 100,000 13,750 + 34% 75,000
100,000 335,000 22,250 + 39% 100,000
