Account title and Explanation Debit($) Credit($) Cash [5,000 x $30] 1,50,000 a To Common stock [5,000 x $0.01] 50 To Paid-in capital in excess of par 1,49,950 [To record issuance of common stock] Legal Services A/c Dr To Preferred Stock ( 5000*100) b 500000 500000 (To record issue of Preferred Stocks) Land A/c Dr 300000 Building A/c To Common Stock (120000* $0.01) Dr 500000 1200 To Additional Paid in Capital 798800 [To record issuance of common stock] Income summary 6,00,000 Retained earnings 6,00,000 [To close net income] e Preferred Dividend 25000 To Cash 25000 Cash dividends [125,000 x $2] 250000 e То Cash 250000 [To record payment of dividends] d Retained earnings 275000 To Cash Dividends 250000 To Preferred Dividend 25000 (To Close dividend account)
Account title and Explanation Debit($) Credit($) Cash [5,000 x $30] 1,50,000 a To Common stock [5,000 x $0.01] 50 To Paid-in capital in excess of par 1,49,950 [To record issuance of common stock] Legal Services A/c Dr To Preferred Stock ( 5000*100) b 500000 500000 (To record issue of Preferred Stocks) Land A/c Dr 300000 Building A/c To Common Stock (120000* $0.01) Dr 500000 1200 To Additional Paid in Capital 798800 [To record issuance of common stock] Income summary 6,00,000 Retained earnings 6,00,000 [To close net income] e Preferred Dividend 25000 To Cash 25000 Cash dividends [125,000 x $2] 250000 e То Cash 250000 [To record payment of dividends] d Retained earnings 275000 To Cash Dividends 250000 To Preferred Dividend 25000 (To Close dividend account)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 10P: Comprehensive The shareholders equity section of Superior Corporations balance sheet as of December...
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Question
B. Prepare Mulatto Company’s
-
- information on par values,
- the number of shares authorized and issued where necessary.
- the sub total for the total paid in capital.
Retained earnings .
total stockholders’ equity.
![Part (A)
Account title and Explanation
Debit($)
Credit($)
Cash [5,000 x $30]
1,50,000
a
To Common stock [5,000 x $0.01]
50
To Paid-in capital in excess of par
1,49,950
[To record issuance of common stock]
Legal Services A/c Dr
To Preferred Stock ( 5000*100)
500000
500000
(To record issue of Preferred Stocks)
Land A/c
Dr
300000
Building A/c
To Common Stock (120000* $0.01)
Dr
500000
1200
To Additional Paid in Capital
798800
[To record issuance of common stock]
Income summary
6,00,000
Retained earnings
6,00,000
[To close net income]
le
Preferred Dividend
25000
То Cash
25000
Cash dividends [125,000 x $2]
250000
le
То Cash
250000
[To record payment of dividends]
Retained earnings
275000
To Cash Dividends
250000
To Preferred Dividend
25000
(To Close dividend account)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90bb893f-aa0e-4cbe-97e3-3b2c67db0321%2F7337a227-be11-4361-a016-8f78f0ddeb93%2Fq7uh68q_processed.png&w=3840&q=75)
Transcribed Image Text:Part (A)
Account title and Explanation
Debit($)
Credit($)
Cash [5,000 x $30]
1,50,000
a
To Common stock [5,000 x $0.01]
50
To Paid-in capital in excess of par
1,49,950
[To record issuance of common stock]
Legal Services A/c Dr
To Preferred Stock ( 5000*100)
500000
500000
(To record issue of Preferred Stocks)
Land A/c
Dr
300000
Building A/c
To Common Stock (120000* $0.01)
Dr
500000
1200
To Additional Paid in Capital
798800
[To record issuance of common stock]
Income summary
6,00,000
Retained earnings
6,00,000
[To close net income]
le
Preferred Dividend
25000
То Cash
25000
Cash dividends [125,000 x $2]
250000
le
То Cash
250000
[To record payment of dividends]
Retained earnings
275000
To Cash Dividends
250000
To Preferred Dividend
25000
(To Close dividend account)
![The owners are desirous of comparing serval financial transactions and possible outcomes to
assist in guiding their decision-making process. They assume that the company will be formed
on January 1, 2020 and that Mulatto Company's charter will authorize 1,000,000 shares of
common stock and 400,000, $100 par value, 5% cumulative preferred stock. Prepare the
company's journal entries and statement of owner's equity based on the following
information:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90bb893f-aa0e-4cbe-97e3-3b2c67db0321%2F7337a227-be11-4361-a016-8f78f0ddeb93%2Ffdk5fmh_processed.png&w=3840&q=75)
Transcribed Image Text:The owners are desirous of comparing serval financial transactions and possible outcomes to
assist in guiding their decision-making process. They assume that the company will be formed
on January 1, 2020 and that Mulatto Company's charter will authorize 1,000,000 shares of
common stock and 400,000, $100 par value, 5% cumulative preferred stock. Prepare the
company's journal entries and statement of owner's equity based on the following
information:
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