Prepare the journal entries with narrations to record the following: The issuances of stock. Close out net income to retained earnings. Dividend declared. Close out dividend to retained earning
Prepare the journal entries with narrations to record the following: The issuances of stock. Close out net income to retained earnings. Dividend declared. Close out dividend to retained earning
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing
Section: Chapter Questions
Problem 19E
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The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2021. In addition, J&K Paint Shop Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative
- Issued 60%shares of class A common stock. Stock has par value of $48.00 per share and was issued at $105.00 per share. (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space).
- Issued 60%shares of no-par class B stock. Issue Price $98.00
- Issued 20%shares of preferred stock at par value. Pa Value is $168.00
- Exchanged 40% shares of class A common stock for Office Furniture and Equipment with an appraised value of $4,000,000.00 and Motor Truck with an appraised value of $10,000,00.00.
- Earned Net income $1,450,000.00.
- Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders.
Using the info above and as a guide:
- Prepare the journal entries with narrations to record the following:
- The issuances of stock.
- Close out net income to
retained earnings . - Dividend declared.
- Close out dividend to retained earnings.
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