EhrlichCo. had the following transactions during the current period. Mar. 2 Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $40,000 for services performed in helping the company to incorporate. June 12 Issued 60,000 shares of $5 par value common stock for cash of $365,000. July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share. Aug. 15 Issued 20,000 shares of common stock for a building with an asking price of $150,000 and a fair value of $140,000 Nov. 28 Purchased 2,000 shares of treasury stock for $80,000. Dec. 15 Sold 500 shares of the treasury stock for $45 per share Instructions: 1. Journalize the transactions. 2. Prepare the stockholders' equity section of the balance sheet. Use the following example as a guide. For Retained Earnings for this example, you can use $1,050,000. Stockholders’ equity
EhrlichCo. had the following transactions during the current period.
Mar. 2 Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $40,000 for services performed in helping the company to incorporate.
June 12 Issued 60,000 shares of $5 par value common stock for cash of $365,000.
July 11 Issued 1,000 shares of $100 par value
Aug. 15 Issued 20,000 shares of common stock for a building with an asking price of $150,000 and a fair value of $140,000
Nov. 28 Purchased 2,000 shares of
Dec. 15 Sold 500 shares of the treasury stock for $45 per share
Instructions:
1. Journalize the transactions.
2. Prepare the
Stockholders’ equity
Paid-in capital:
Capital stock:
9% preferred stock, $100 par value, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding $600,000
Common stock, no par, $5 par value, 500,000 shares authorized, 400,000 shares issued, and 390,000 outstanding 2,000,000
Total capital stock $2,600,000
Additional paid-in capital :
In excess of par—preferred stock 30,000
In excess of par value—common stock 1,040,000
From treasury stock 10,000
Total additional paid-in capital 1,080,000
Total paid-in capital 3,680,000
Retained earnings 1,050,000
Total paid-in capital and retained earnings 4,730,000
Less: Treasury stock (10,000 common shares) 80,000
Total stockholders’ equity $4,650,000
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