On April 1, 2020, C'est Cheese issues 20,000 shares of 4%, $10 par, cumulative preferred stock $15 per share. It had previously issued 65,000 shares of $1 par, common stock. (HINT: make th journal entry.) Using all of the proceeds from the issuance of the preferred stock, on the same day, it purchases fixed assets for its operations, and allocates the proceeds from the stock issuance as follows: • 35% for a new milk-separating machine, with a salvage value of $2,000, which is estimated to separate 100,000 gallons of milk over its 8-year useful life • 40% for a new refrigerator with a 10-year useful life, and a salvage value of $1,300, for which uses straight-line • 25% for a new delivery van with a 5-year useful life, and a salvage value of $5,000, for which i uses double-declining balance On May 31, 2022, after recording updated depreciation, it sells the delivery van for cash of $34,000. Then, using all of the proceeds from the sale of the delivery van, it declares a dividend, payable on July 22, 2022.

On April 1, 2020, C'est Cheese issues 20,000 shares of 4%, $10 par, cumulative preferred stock $15 per share. It had previously issued 65,000 shares of $1 par, common stock. (HINT: make th journal entry.) Using all of the proceeds from the issuance of the preferred stock, on the same day, it purchases fixed assets for its operations, and allocates the proceeds from the stock issuance as follows: • 35% for a new milk-separating machine, with a salvage value of $2,000, which is estimated to separate 100,000 gallons of milk over its 8-year useful life • 40% for a new refrigerator with a 10-year useful life, and a salvage value of $1,300, for which uses straight-line • 25% for a new delivery van with a 5-year useful life, and a salvage value of $5,000, for which i uses double-declining balance On May 31, 2022, after recording updated depreciation, it sells the delivery van for cash of $34,000. Then, using all of the proceeds from the sale of the delivery van, it declares a dividend, payable on July 22, 2022.

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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