Required a. Record the transactions in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA). or financing activity (FA). Use NA to indicate that an element was not affected by the event. Assets Liab. + Cash = Equity Com. Stk. + PIC in Excess Rev. Exp. Net Inc. Proprietorships, Partnerships, and Corporations b. Determine the amount Home Medical would report for common stock on the December 31, 2011, balance sheet. c. Determine the amount Home Medical would report for paid-in capital in excess of par. Cash Flow 595

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
LO 2
Exercise 11-4A Effect of issuing common stock on the balance sheet
Newly formed Home Medical Corporation has 100,000 shares of $5 par common stock autho-
rized. On March 1, 2011, Home Medical issued 10,000 shares of the stock for $12 per share. On
May 2 the company issued an additional 20,000 shares for $20 per share. Home Medical was not
affected by other events during 2011.
Required
a. Record the transactions in a horizontal statements model like the following one. In the Cash
Flow column, indicate whether the item is an operating activity (OA), investing activity (IA),
or financing activity (FA). Use NA to indicate that an element was not affected by the event.
Assets Liab. +
Cash =
Equity
Com. Stk. + PIC in Excess
Rev. Exp. = Net Inc.
Proprietorships, Partnerships, and Corporations
b. Determine the amount Home Medical would report for common stock on the December 31,
2011, balance sheet.
c. Determine the amount Home Medical would report for paid-in capital in excess of par.
d. What is the total amount of capital contributed by the owners?
-
e. What amount of total assets would Home Medical report on the December 31, 2011, balance
sheet?
f. Prepare journal entries to record the March 1 and May 2 transactions.
Cash Flow
595
Transcribed Image Text:LO 2 Exercise 11-4A Effect of issuing common stock on the balance sheet Newly formed Home Medical Corporation has 100,000 shares of $5 par common stock autho- rized. On March 1, 2011, Home Medical issued 10,000 shares of the stock for $12 per share. On May 2 the company issued an additional 20,000 shares for $20 per share. Home Medical was not affected by other events during 2011. Required a. Record the transactions in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event. Assets Liab. + Cash = Equity Com. Stk. + PIC in Excess Rev. Exp. = Net Inc. Proprietorships, Partnerships, and Corporations b. Determine the amount Home Medical would report for common stock on the December 31, 2011, balance sheet. c. Determine the amount Home Medical would report for paid-in capital in excess of par. d. What is the total amount of capital contributed by the owners? - e. What amount of total assets would Home Medical report on the December 31, 2011, balance sheet? f. Prepare journal entries to record the March 1 and May 2 transactions. Cash Flow 595
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Basic Accounting Terms
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education