PartAIn late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 shares of commonstock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2,2021, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $12 per share. Also on Januaryall 1,000,000 shares of preferred stock are issued at $25 per share.Required:1. Prepare journal entries to record these transactions.2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021. (Assume net income for the firstquarter 2021 was $1,050,000.)Part BDuring 2021, the Nicklaus Corporation participated in three treasury stock transactions:a. On June 30, 2021, the corporation reacquires 280,000 shares for the treasury at a price of $14 per share.b. On July 31, 2021, 40,000 treasury shares are reissued at $17 per share.c. On September 30, 2021, 40,000 treasury shares are reissued at $12 per share.Required:1. Prepare journal entries to record these transactions.2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30,2021. (Assume net income for the second and third quarter was $2,500,000.)

Shareholders' equity, also known as stockholders' equity, represents the residual interest in the…

Answered: In late 2020, the Nicklaus Corporation…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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On January 5, 2020, Buffalo Corporation received a charter granting the right to issue 5,500 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 46,300 shares of $10 par value common stock. It then completed these transactions. Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. Record the journal entry for the transaction listed above.

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