A corporation was organized in January 2017 with authorized capital of $10 par value common stock. On February 1, 2020, shares were issued at par for cash. On March 1, 2020, the corporation's attorney accepted 7,000 shares of common stock in settlement for legal services with a fair value of $90,000. Additional paid-in capital would increase on February 1, 2020 March 1, 2020 а. Yes No b. Yes Yes C. No No d. No Yes

A corporation was organized in January 2017 with authorized capital of $10 par value common stock. On February 1, 2020, shares were issued at par for cash. On March 1, 2020, the corporation's attorney accepted 7,000 shares of common stock in settlement for legal services with a fair value of $90,000. Additional paid-in capital would increase on February 1, 2020 March 1, 2020 а. Yes No b. Yes Yes C. No No d. No Yes

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A corporation was organized in January 2017 with authorized capital of $10 par value
common stock. On February 1, 2020, shares were issued at par for cash. On March 1,
2020, the corporation's attorney accepted 7,000 shares of common stock in settlement for
legal services with a fair value of $90,000. Additional paid-in capital would increase on
February 1, 2020 March 1, 2020
а.
Yes
No
b.
Yes
Yes
C.
No
No
d.
No
Yes

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Queenstown Corporation issues 4,000, $4 cumulative preferred shares at $80 each and 12,000 common shares at $18 at the beginning of 2022. Each preferred share is convertible into four common shares. During the years 2022 and 2023, the following transactions affected Queenstown Corporation's shareholders' equity accounts: 2022 Dec. 10 Declared and paid $12,000 of annual dividends to preferred shareholders. 2023 Dec. 10 Dec. 21 Required: a) b) Declared and paid the annual dividend to preferred shareholders and a $4,000 dividend to common shareholders. The preferred shares were converted into common shares. Journalize each of the 2022 and 2023 transactions. After the preferred shares are converted, what is the total number of common shares issued?
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Hammond Manufacturing Inc. was legally incorporated on January 2, 2020. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.0 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 2020 Jan. 12 Issued 40,300 common shares at $4.4 each. 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $32,000. 31 Issued 76,000 common shares in exchange for land, building, and equipment, which have fair market values of $356,000, $476,000, and $44,000, respectively. Mar. 4 Purchased equipment at a cost of $8,120 cash. This was thought to be a special bargain price. It was felt that at least $10,400 would normally have had to be paid to acquire this equipment. Dec. 31 During 2020, the company incurred a loss of $92,000. The Income Summary account was closed. 2021…
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The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2019: Common Shares (22,000 shares authorized and outstanding) $ 1,144,000 Retained Earnings (Deficit) (190,000) On January 2, 2020, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common shares over to the creditors in full payment of the $240,000 Notes Payable, writing up Buildings by $128,300, and eliminating the deficit. Assume that Yutao Shui follows ASPE. Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts) Account Titles and Explanation (To record the elimination of the deficit against share capital) (To record write-up of buildings to fair value and record the negotiated change in control) Debit…
Hammond Manufacturing Inc. was legally incorporated on January 2, 2020. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.0 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 2020 Jan. 12 Issued 40,300 common shares at $4.4 each. 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $32,000. 31 Issued 76,000 common shares in exchange for land, building, and equipment, which have fair market values of $356,000, $476,000, and $44,000, respectively. Mar. 4 Purchased equipment at a cost of $8,120 cash. This was thought to be a special bargain price. It was felt that at least $10,400 would normally have had to be paid to acquire this equipment. Dec. 31 During 2020, the company incurred a loss of $92,000. The Income Summary account was closed. 2021…
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C5.1
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