Comprehensive Stockholders' Equity Transactions and Stockholders' Equity P4. Kraft Unlimited, Ic., was organized and authorized to issue 5,000 shares of $100 par value, 9 percent preferred stock and 50,000 shares of no par, $5 stated value com- mon stock on July 1, 2014. Stock-related transactions for Kraft Unlimited follow. Issued 10,000 shares of common stock at $11 per share. Issued 500 shares of common stock at $11 per share for services rendered in connection with the organization of the company. Issued 1,000 shares of preferred stock at par value for cash. Issued 2,500 shares of common stock for land on which the asking price was $35,000. Market value of the stock was $12. Management wishes to record July 1 1 10 the land at the market value of the stock. Aug. 2 Purchased 1,500 shares of its common stock at $13 per share. Declared a cash dividend for one month on the outstanding preferred stock and $0.02 per share on common stock outstanding, payable on August 22 to stockholders of record on August 12. 10 12 Date of record for cash dividends. 22 Paid cash dividends. REQUIRED 1. Prepare journal entries to record these transactions. 2. Prepare the stockholders' equity section of Kraft's balance sheet as it would appear on August 31, 2014. Net income for July was zero and August was $11,500.
Comprehensive Stockholders' Equity Transactions and Stockholders' Equity P4. Kraft Unlimited, Ic., was organized and authorized to issue 5,000 shares of $100 par value, 9 percent preferred stock and 50,000 shares of no par, $5 stated value com- mon stock on July 1, 2014. Stock-related transactions for Kraft Unlimited follow. Issued 10,000 shares of common stock at $11 per share. Issued 500 shares of common stock at $11 per share for services rendered in connection with the organization of the company. Issued 1,000 shares of preferred stock at par value for cash. Issued 2,500 shares of common stock for land on which the asking price was $35,000. Market value of the stock was $12. Management wishes to record July 1 1 10 the land at the market value of the stock. Aug. 2 Purchased 1,500 shares of its common stock at $13 per share. Declared a cash dividend for one month on the outstanding preferred stock and $0.02 per share on common stock outstanding, payable on August 22 to stockholders of record on August 12. 10 12 Date of record for cash dividends. 22 Paid cash dividends. REQUIRED 1. Prepare journal entries to record these transactions. 2. Prepare the stockholders' equity section of Kraft's balance sheet as it would appear on August 31, 2014. Net income for July was zero and August was $11,500.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In Principles of Accounting
12th Edition
Belverd E. + 5 others
Publisher: Cengage Learning
ISBN: 9781133593102
Question 4P in Chapter 13 has not been answered yet. Could it please be answered.
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Transcribed Image Text:Comprehensive Stockholders' Equity Transactions and Stockholders' Equity
P4. Kraft Unlimited, Inc., was organized and authorized to issue 5,000 shares of $100
par value, 9 percent preferred stock and 50,000 shares of no par, $5 stated value com-
mon stock on July 1, 2014. Stock-related transactions for Kraft Unlimited follow.
Issued 10,000 shares of common stock at $11 per share.
Issued 500 shares of common stock at $11 per share for services rendered in
connection with the organization of the company.
Issued 1,000 shares of preferred stock at par value for cash.
Issued 2,500 shares of common stock for land on which the asking price was
$35,000. Market value of the stock was $12. Management wishes to record
July 1
1
10
the land at the market value of the stock.
Aug. 2 Purchased 1,500 shares of its common stock at $13 per share.
10
Declared a cash dividend for one month on the outstanding preferred stock
and $0.02 per share on common stock outstanding, payable on August 22
to stockholders of record on August 12.
12
Date of record for cash dividends.
22
Paid cash dividends.
REQUIRED
1. Prepare journal entries to record these transactions.
2. Prepare the stockholders' equity section of Kraft's balance sheet as it would appear
on August 31, 2014. Net income for July was zero and August was $11,500.
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