Assume one year later (2019) the company KY Jeweller’s Ltd has been formed and the owners are desirous of companying several financial transactions and possible outcomes to assist in guiding their decision-making process. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information. The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 400,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of 1,480,000 The company sold 110,000 shares of common stock with $1 par value. Issued 24,000 shares of $ 14 par value preferred stock. Shares were issued at par. Earned net income of $1,000,000 Dividend declared and paid - $0.15 per share on common stock Dividend declared and paid - $5 per share on preferred stock Using the information above and as guided: Prepare the Journal entries and closing entries for the above transaction Prepare the owner’s equity section of the balance sheet based on the info above.

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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Assume one year later (2019) the company KY Jeweller’s Ltd has been formed and the owners are desirous of companying several financial transactions and possible outcomes to assist in guiding their decision-making process. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information.

The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration:

KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 400,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of 1,480,000

The company sold 110,000 shares of common stock with $1 par value.

Issued 24,000 shares of $ 14 par value preferred stock. Shares were issued at par.

Earned net income of $1,000,000

Dividend declared and paid - $0.15 per share on common stock

Dividend declared and paid - $5 per share on preferred stock

Using the information above and as guided:

Prepare the Journal entries and closing entries for the above transaction

Prepare the owner’s equity section of the balance sheet based on the info above.

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