Bagman Corporation was organized early in 2014. The articles of incorporation authorize 30,000 shares of $100 par value, 10% cumulative preferred stock and 600,000 shares of $5 par value common stock. The following transactions affecting stockholders’ equity were completed during the first year: 1. Issued 50 shares of preferred stock at par value as payment for legal services. 2 2. Issued 4,000 shares of common stock at $20 per share and 800 shares of preferred stock at par. 3. Exchanged 10,000 shares of common stock for land with an appraised value of $120,000 and a building with an appraised value of $90,000 4. Declared the required cash dividend on preferred stock and a $2 per share dividend on common stock. 5. Closed the $200,000 credit balance in the Income Summary Account. Required: a. Prepare journal entries to record these transactions. b. Prepare the stockholders’ equity section of the balance sheet.
Bagman Corporation was organized early in 2014. The articles of incorporation
authorize 30,000 shares of $100 par value, 10% cumulative
600,000 shares of $5 par value common stock. The following transactions affecting
1. Issued 50 shares of preferred stock at par value as payment for legal services.
2
2. Issued 4,000 shares of common stock at $20 per share and 800 shares of preferred
stock at par.
3. Exchanged 10,000 shares of common stock for land with an appraised value of
$120,000 and a building with an appraised value of $90,000
4. Declared the required cash dividend on preferred stock and a $2 per share dividend
on common stock.
5. Closed the $200,000 credit balance in the Income Summary Account.
Required:
a. Prepare
b. Prepare the stockholders’ equity section of the
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