Instructions Stockholders’ equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below. Preferred stock subscriptions receivable $ 50,000 Preferred stock, $10 par, 9% (200,000 shares authorized; 20,000 shares issued) 200,000 Preferred stock subscribed (10,000 shares) 100,000 Paid-in capital in excess of par—preferred stock 40,000 Common stock, $10 par (100,000 shares authorized; 60,000 shares issued) 600,000 Paid-in capital in excess of par—common stock 250,000 Retained earnings 750,000 During 20--, Gonzales Company completed the following transactions affecting stockholders’ equity: Transactions: (a) Received $20,000 for the balance due on subscriptions for preferred stock with a par value of $40,000 and issued the stock. (b) Purchased 10,000 shares of common treasury stock for $18 per share. (c) Received subscriptions for 10,000 shares of common stock at $19 per share, collecting down payments of $45,000. (d) Issued 15,000 shares of common stock in exchange for land with a fair market value of $290,000. (e) Sold 5,000 shares of common treasury stock for $100,000. (f) Issued 10,000 shares of preferred stock at $11.50 per share, receiving cash. (g) Sold 3,000 shares of common treasury stock for $17 per share. Required: 1. Prepare general journal entries for the transactions. 2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000. 3. Prepare the stockholders’ equity section of the balance sheet as of December 31, 20--. Net income for the year was $825,000 and dividends of $400,000 were paid. General Journal 1. Prepare general journal entries for these transactions on December 31. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 T-Accounts 2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000. Additional Instructions Cash Bal. 300,000 Bal. Land Preferred Stock Subscriptions Receivable Bal. 50,000 Bal. Preferred Stock Subscribed Bal. 100,000 Bal. Preferred Stock Bal. 200,000 Bal. Paid-In Capital in Excess of Par-Preferred Stock Bal. 40,000 Bal. Common Treasury Stock Bal. Common Stock Subscriptions Receivable Common Stock Subscribed Common Stock Bal. 600,000 Bal. Paid-In Capital in Excess of Par-Common Stock Bal. 250,000 Bal. Paid-In Capital from Sale of Treasury Stock Bal. Stockholders’ Equity 3. Prepare the stockholders’ equity section of the balance sheet as of December 31, 20--. Net income for the year was $825,000 and dividends of $400,000 were paid. Additional Instruction Gonzales Company Balance Sheet (Partial) December 31, 20-- 1 Stockholders’ Equity 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Instructions Stockholders’ equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below. Preferred stock subscriptions receivable $ 50,000 Preferred stock, $10 par, 9% (200,000 shares authorized; 20,000 shares issued) 200,000 Preferred stock subscribed (10,000 shares) 100,000 Paid-in capital in excess of par—preferred stock 40,000 Common stock, $10 par (100,000 shares authorized; 60,000 shares issued) 600,000 Paid-in capital in excess of par—common stock 250,000 Retained earnings 750,000 During 20--, Gonzales Company completed the following transactions affecting stockholders’ equity: Transactions: (a) Received $20,000 for the balance due on subscriptions for preferred stock with a par value of $40,000 and issued the stock. (b) Purchased 10,000 shares of common treasury stock for $18 per share. (c) Received subscriptions for 10,000 shares of common stock at $19 per share, collecting down payments of $45,000. (d) Issued 15,000 shares of common stock in exchange for land with a fair market value of $290,000. (e) Sold 5,000 shares of common treasury stock for $100,000. (f) Issued 10,000 shares of preferred stock at $11.50 per share, receiving cash. (g) Sold 3,000 shares of common treasury stock for $17 per share. Required: 1. Prepare general journal entries for the transactions. 2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000. 3. Prepare the stockholders’ equity section of the balance sheet as of December 31, 20--. Net income for the year was $825,000 and dividends of $400,000 were paid. General Journal 1. Prepare general journal entries for these transactions on December 31. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 T-Accounts 2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000. Additional Instructions Cash Bal. 300,000 Bal. Land Preferred Stock Subscriptions Receivable Bal. 50,000 Bal. Preferred Stock Subscribed Bal. 100,000 Bal. Preferred Stock Bal. 200,000 Bal. Paid-In Capital in Excess of Par-Preferred Stock Bal. 40,000 Bal. Common Treasury Stock Bal. Common Stock Subscriptions Receivable Common Stock Subscribed Common Stock Bal. 600,000 Bal. Paid-In Capital in Excess of Par-Common Stock Bal. 250,000 Bal. Paid-In Capital from Sale of Treasury Stock Bal. Stockholders’ Equity 3. Prepare the stockholders’ equity section of the balance sheet as of December 31, 20--. Net income for the year was $825,000 and dividends of $400,000 were paid. Additional Instruction Gonzales Company Balance Sheet (Partial) December 31, 20-- 1 Stockholders’ Equity 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

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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Question

Instructions

Stockholders’ equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below.

Preferred stock subscriptions receivable	$ 50,000
Preferred stock, $10 par, 9% (200,000 shares authorized; 20,000 shares issued)	200,000
Preferred stock subscribed (10,000 shares)	100,000
Paid-in capital in excess of par—preferred stock	40,000
Common stock, $10 par (100,000 shares authorized; 60,000 shares issued)	600,000
Paid-in capital in excess of par—common stock	250,000
Retained earnings	750,000

During 20--, Gonzales Company completed the following transactions affecting stockholders’ equity:

Transactions:
(a)	Received $20,000 for the balance due on subscriptions for preferred stock with a par value of $40,000 and issued the stock.
(b)	Purchased 10,000 shares of common treasury stock for $18 per share.
(c)	Received subscriptions for 10,000 shares of common stock at $19 per share, collecting down payments of $45,000.
(d)	Issued 15,000 shares of common stock in exchange for land with a fair market value of $290,000.
(e)	Sold 5,000 shares of common treasury stock for $100,000.
(f)	Issued 10,000 shares of preferred stock at $11.50 per share, receiving cash.
(g)	Sold 3,000 shares of common treasury stock for $17 per share.

Required:

1.	Prepare general journal entries for the transactions.
2.	Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000.
3.	Prepare the stockholders’ equity section of the balance sheet as of December 31, 20--. Net income for the year was $825,000 and dividends of $400,000 were paid.

General Journal

1. Prepare general journal entries for these transactions on December 31.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

T-Accounts

2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000. Additional Instructions

Cash
Bal.	300,000





Bal.

Land

Preferred Stock Subscriptions Receivable
Bal.	50,000
Bal.

Preferred Stock Subscribed
	Bal.	100,000
	Bal.

Preferred Stock
	Bal.	200,000


	Bal.

Paid-In Capital in Excess of Par-Preferred Stock
	Bal.	40,000

	Bal.

Common Treasury Stock


Bal.

Common Stock Subscriptions Receivable

Common Stock Subscribed

Common Stock
	Bal.	600,000

	Bal.

Paid-In Capital in Excess of Par-Common Stock
	Bal.	250,000


	Bal.

Paid-In Capital from Sale of Treasury Stock

		Bal.

Stockholders’ Equity

3. Prepare the stockholders’ equity section of the balance sheet as of December 31, 20--. Net income for the year was $825,000 and dividends of $400,000 were paid. Additional Instruction

Gonzales Company

Balance Sheet (Partial)

December 31, 20--

1	Stockholders’ Equity
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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