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Question 2 Bagman Corporation was organized early in 2014. The articles of incorporation authorize 30,000 shares of $100 par value, 10% cumulative preferred stock and 600,000 shares of $5 par value common stock. The following transactions affecting stockholders' equity were completed during the first year: 1. Issued 50 shares of preferred stock at par value as payment for legal services. 2. Issued 4,000 shares of common stock at $20 per share and 800 shares of preferred stock at par. 3. Exchanged 10,000 shares of common stock for land with an appraised value of $120,000 and a building with an appraised value of $90,000 4. Declared the required cash dividend on preferred stock and a $2 per share dividend on common stock. 5. Closed the $200,000 credit balance in the Income Summary Account. Required: a. Prepare journal entries to record these transactions. b. Prepare the stockholders' equity section of the balance sheet.

Question 2 Bagman Corporation was organized early in 2014. The articles of incorporation authorize 30,000 shares of $100 par value, 10% cumulative preferred stock and 600,000 shares of $5 par value common stock. The following transactions affecting stockholders' equity were completed during the first year: 1. Issued 50 shares of preferred stock at par value as payment for legal services. 2. Issued 4,000 shares of common stock at $20 per share and 800 shares of preferred stock at par. 3. Exchanged 10,000 shares of common stock for land with an appraised value of $120,000 and a building with an appraised value of $90,000 4. Declared the required cash dividend on preferred stock and a $2 per share dividend on common stock. 5. Closed the $200,000 credit balance in the Income Summary Account. Required: a. Prepare journal entries to record these transactions. b. Prepare the stockholders' equity section of the balance sheet.

FINANCIAL ACCOUNTING
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 2 Bagman Corporation was organized early in 2014. The articles of incorporation authorize 30,000 shares of $100 par value, 10% cumulative preferred stock and 600,000 shares of $5 par value common stock. The following transactions affecting stockholders' equity were completed during the first year: 1. Issued 50 shares of preferred stock at par value as payment for legal services. 1 2. Issued 4,000 shares of common stock at $20 per share and 800 shares of preferred stock at par. 3. Exchanged 10,000 shares of common stock for land with an appraised value of $120,000 and a building with an appraised value of $90,000 4. Declared the required cash dividend on preferred stock and a $2 per share dividend on common stock. 5. Closed the $200,000 credit balance in the Income Summary Account. Required: a. Prepare journal entries to record these transactions. b. Prepare the stockholders' equity section of the balance sheet.
Transcribed Image Text:Question 2 Bagman Corporation was organized early in 2014. The articles of incorporation authorize 30,000 shares of $100 par value, 10% cumulative preferred stock and 600,000 shares of $5 par value common stock. The following transactions affecting stockholders' equity were completed during the first year: 1. Issued 50 shares of preferred stock at par value as payment for legal services. 1 2. Issued 4,000 shares of common stock at $20 per share and 800 shares of preferred stock at par. 3. Exchanged 10,000 shares of common stock for land with an appraised value of $120,000 and a building with an appraised value of $90,000 4. Declared the required cash dividend on preferred stock and a $2 per share dividend on common stock. 5. Closed the $200,000 credit balance in the Income Summary Account. Required: a. Prepare journal entries to record these transactions. b. Prepare the stockholders' equity section of the balance sheet.
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