Chapter 13 HW Problems1. The first year of operation for the Sommerville Corporation was 2007. They authorized 5,000,000 shares of $2 par common stock and sold a total of 1,500,000 shares to stockholders. In 2012, Sommerville, Corporation repurchased 25,000 shares. How many shares are outstanding? 1,475,0001,500,000 shares issued – 25,000 shares treasury stock = 1,475,000 shares outstanding 2. What happens to the accounting equation when you issue stock for cash?Assets and equity go up.Assets Liabilities Stockholders’ EquityCash increases Common Stock increases3. After 50 years in business, Jameson, Inc. declared a 2-for-1 stock split on January 2, 2011. At the time of the split, Jameson, Inc. had 500,000 shares of $1 par common stock outstanding. What is the impact of the split on Jameson’s total shareholder equity? no effect Before Stock Split After Stock Split500,000 shares @ $1 par value 1,000,000 shares @ $.50 par value4. The Yard Depot Corporation Board of Directors declared a cash dividend of $.15 per common share ofstock on January 2, 2011. The date of record is set at January 10th and the payment date is January 25th. What is the impact to the Yard Depot Financial Statements on January 25th, the payment date? Assets decrease and Liabilities decrease5. Ronnie, Oliver and Phyllis, who are partners in the Poultry Farm Company, had beginning capital balances of $35,000, $62,000 and $28,000, respectively. If the partners share income and losses based on the ratio of their beginning capital balances, Oliver’s share of 97,500 partnership income would be: $48,3606. Greenbriar Corporation has 200,000 shares of 9%, $50 par value cumulative preferred stock authorized, 80,000 shares issued and 75,000 outstanding, as well as 300,000 shares of $10 par value common stock issued and outstanding. Dividends relative to the preferred stock are two years in arrears. If Greenbriar declares a $2,137,500 dividend during the current period, the amount of the dividend applicable to the preferred and common stockholders is: $1,012,500 and $1,125,000, respectively7. As part of the Federal bailout program, Prairie Bank issued preferred stock with a $500 par value and a stated dividend rate of 10% to the Federal government. The stock was sold for $5,000 and entitles the owner of each share, (the Fed) to an annual dividend of: $ 50.00 8. The Nathan Furniture Company declared a dividend on May 10, set the date of record as May 15 and willpay the dividend on June 5th. Will Juliet, who purchased her shares on May 11th, get the dividend?Yes Explain.9. Laptop, Inc. is a not for profit company with a goal to provide laptops to all school age children. They obtained their first loan for $250,000 with an 8% interest rate. Laptop Inc. estimates that they will have net income of $165,000. As a not for profit, they do not pay income taxes. The company has total stockholders’ equity of $425,000. Laptop, Inc.’s times interest earned ratio is :Close to 910. Laptop Inc.’s debt to equity ratio is:58.811. Parsley, Pepper and Thyme are partners in the Spices Company. Their partnership income sharing agreement provides that Parsley and Thyme are to receive salary allowances of $118,800 and $67,200, respectively and that any remaining income or loss is to be divided equally among all partners. If the company's income was $156,000, Parley’s share would be: $108,80012. In 2008, Miles, Ana and Cindy, who are partners in the MAC Company, had average capital balances of $114,000, $98,000 and $128,000, respectively. The partners share profits and losses by allowing a 12%return on average capital, with any remaining income or loss divided in a ratio of 5:3:2. If the company's income for the current year was $147,600, Cindy’s capital account would increase by: $36,72013. What do the following terms mean (as shown in the stockholders’ equity section of a balance sheet)?IssuedCallableRedeemableAuthorizedOutstandingConvertiblePar