PartA
In late 2017, the Nicklaus Corporation was formed. The corporatecharter authorizes the issuance of 4,000,000 shares of common stockcarrying a $1 par value, and 1,000,000 shares of $5 par value,noncumulative, nonparticipating preferred stock. On January 2,2018, 2,000,000 shares of the common stock are issued in exchangefor cash at an average price of $10 per share. Also on January 2,all 1,000,000 shares of preferred stock are issued at $20 pershare.

Required:
1. Prepare journal entries to record thesetransactions. (1/2 Record issue of common shares. 1/2 Record issueof preferred shares.)
2. Prepare the shareholders' equity section of theNicklaus balance sheet as of March 31, 2018. (Assume net income forthe first quarter 2018 was $1,350,000.)

Part B
During 2018, the Nicklaus Corporation participated in threetreasury stock transactions:

On June 30, 2018, the corporation reacquires 160,000 shares forthe treasury at a price of $12 per share.

On July 31, 2018, 30,000 treasury shares are reissued at $15 pershare.

On September 30, 2018, 30,000 treasury shares are reissued at$10 per share.

Required:
1. Prepare journal entries to record thesetransactions. (6/30 Record acquisition of treasury stock. 7/31Record the reissuance of 30,000 treasury shares on July 31st. 9/30Record the reissuance of 30,000 treasury shares on September30th.)
2. Prepare the Nicklaus Corporation shareholders'equity section as it would appear in a balance sheet prepared atSeptember 30, 2018. (Assume net income for the second and thirdquarter was $2,800,000.)

Part C
On October 1, 2018, Nicklaus Corporation receives permission toreplace its $1 par value common stock (4,000,000 shares authorized,2,000,000 shares issued, and 1,900,000 shares outstanding) with anew common stock issue having a $.50 par value. Since the new parvalue is one-half the amount of the old, this represents a 2-for-1stock split. That is, the shareholders will receive two shares ofthe $.50 par stock in exchange for each share of the $1 par stockthey own. The $1 par stock will be collected and destroyed by theissuing corporation.

On November 1, 2018, the Nicklaus Corporation declares a $0.10 pershare cash dividend on common stock and a $0.27 per share cashdividend on preferred stock. Payment is scheduled for December 1,2018, to shareholders of record on November 15, 2018.

On December 2, 2018, the Nicklaus Corporation declares a 2% stockdividend payable on December 28, 2018, to shareholders of record onDecember 14. At the date of declaration, the common stock wasselling in the open market at $10 per share. The dividend willresult in 76,000 (0.02 × 3,800,000) additional shares being issuedto shareholders.

Required:
1. Prepare journal entries to record thedeclaration and payment of these stock and cash dividends. (10/1Record the entry for the 2-for-1 stock split. 11/1 Recorddeclaration of cash dividend for common shares and preferredshares.. 11/15 Record the entry on date of record.. 12/1 Recordpayment of cash dividend for common shares and preferred shares.12/2 Record declaration of common stock dividend. 12/28 Recorddistribution of common stock dividend.)

2. Prepare the December 31, 2018, shareholders'equity section of the balance sheet for the Nicklaus Corporation.(Assume net income for the fourth quarter was $2,300,000.)
3. Prepare a statement of shareholders' equity forNicklaus Corporation for 2018.

	prefer stock	common stock	paid in capital	retained earing	treasury stock	total shareholder equity
Jan 2 2018
issuance of preferred stock
issuance of common stock
purchase of treasury stock
sale of treasury stock
net income
common cash dividends
preferred cash dividends
stock dividend