Requirement A 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. Requirement B Prepare the company’s Stockholders equity section of the balance sheet at December 31, 2021. (Hint!!!!!!!) The following information must be clearly stated/shown: information on par or par values for all classes of shares which must be shown separately. the number of shares authorized and issued where necessary. the sub total for the total paid in capital. Retained earnings. total stockholders’ equity.
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 40% of authorized shares of class A common stock. Stock has par value of $45 per share and was issued at $62 per share.
- Issued at $60, 40% of authorized shares of no-par class B stock.
- Issued 30% of authorized shares of preferred stock at par value $125.
- Exchanged 40% of authorized shares of class A common stock for Office Furniture and Equipment with an appraised value $4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00
- Earned Net Income $2,000,000.00
- Declared interim dividends for preferred shareholders as ell as $0.80 per share to common stockholders.
Requirement A
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.
Requirement B
Prepare the company’s
-
- information on par or par values for all classes of shares which must be shown separately.
- the number of shares authorized and issued where necessary.
- the sub total for the total paid in capital.
- Retained earnings.
- total stockholders’ equity.
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