Problem 3. In 2013 Bill Barnes and several friends organized a corporation called Barnes Communications, Inc. The corporation was authorized to issue 500 000 shares of $10 par value, 6% cumulative preferred stock and 4000 000 shares of $7 par value common stock and issued 120 000 preferred shares and 1000 000 common shares at the beginning of 2013 at par value. The following transactions (among others) occurred during the 2014: Jan 6 Issued for cash 200 000 shares of common stock at $18 per share. The shares were issued to Barnes and 10 other investors. Jan.7 Issued an additional 300 shares of common stock to Barnes exchange for his services in organizing a corporation. The stockholders agreed that these services were worth $7 000. Jan.12 Issued 25 000 shares of preferred stock for cash of $300 000 June 4 Acquired land as a building site in exchange for 150 000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that the common stocks was to be valued for purposes of this transaction at $15 per share. Aug. 8 The corporation purchased back 100 000 of its common shares from market at $13 per share.
Problem 3. In 2013 Bill Barnes and several friends organized a corporation called Barnes Communications, Inc. The corporation was authorized to issue 500 000 shares of $10 par value, 6% cumulative preferred stock and 4000 000 shares of $7 par value common stock and issued 120 000 preferred shares and 1000 000 common shares at the beginning of 2013 at par value. The following transactions (among others) occurred during the 2014: Jan 6 Issued for cash 200 000 shares of common stock at $18 per share. The shares were issued to Barnes and 10 other investors. Jan.7 Issued an additional 300 shares of common stock to Barnes exchange for his services in organizing a corporation. The stockholders agreed that these services were worth $7 000. Jan.12 Issued 25 000 shares of preferred stock for cash of $300 000 June 4 Acquired land as a building site in exchange for 150 000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that the common stocks was to be valued for purposes of this transaction at $15 per share. Aug. 8 The corporation purchased back 100 000 of its common shares from market at $13 per share.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
PLEASE DO NOT GIVE SOLUTION IN IMAGE FORMAT
Transcribed Image Text:Problem 3.
In 2013 Bill Barnes and several friends organized a corporation called Barnes Communications, Inc. The
corporation was authorized to issue 500 000 shares of $10 par value, 6% cumulative preferred stock and
4000 000 shares of $7 par value common stock and issued 120 000 preferred shares and 1000 000 common
shares at the beginning of 2013 at par value. The following transactions (among others) occurred during the
2014:
Jan 6 Issued for cash 200 000 shares of common stock at $18 per share. The shares were issued to Barnes
and 10 other investors.
Jan.7 Issued an additional 300 shares of common stock to Barnes exchange for his services in organizing a
corporation. The stockholders agreed that these services were worth $7 000.
Jan.12 Issued 25 000 shares of preferred stock for cash of $300 000
June 4 Acquired land as a building site in exchange for 150 000 shares of common stock. In view of the
appraised value of the land and the progress of the company, the directors agreed that the common
stocks was to be valued for purposes of this transaction at $15 per share.
Aug. 8 The corporation purchased back 100 000 of its common shares from market at $13 per share.
Transcribed Image Text:Nov.15 The annual dividend was declared for all types of shares to be paid December 20. Each common
share was paying $0.4 per share. (Hint: In 2013 no dividends were paid to preferred and common
shareholders).
Dec. 1 Reissued 60 000 of the treasury stock at a price $18 per share.
Dec.20 Paid the cash dividend declared on November 15
Dec.31 After the revenue and expenses were closed into the Income Summary account, that account
indicated a net income of $1 972 000. Retained earnings as at December 31, 2013 was $250 000.
Instructions
Prepare journal entries in general journal form to record the above transactions. Include entries at December
31 to close the Income Summary to Dividends account.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education