rlich Corporation is authorized to issue 20,000,000 shares of $10 par value common stock and 1,000,000 shares of its 6% cumulative $100 par value preferred stock. During 2020, it had the following transactions: Jan. 5 Issued 15,000 shares of common stock for $80/share. Feb. 8 Issued 7,000 shares of its preferred stock in exchange for land with a fair value of $900,000 Apr. 1 Purchased 1,000 shares of its common stock (for the treasury) at $80 per share. May 9 Resold 500 shares of its common stock purchased on April 1 at $85 per share June 2 Resold 400 shares of its common stock purchased on April 1 at $60 per share. Dec. 31 Reported net income of $2,500,000 INSTRUCTIONS: Prepare the journal entries to record
Ehrlich Corporation is authorized to issue 20,000,000 shares of $10 par value common stock and 1,000,000 shares of its 6% cumulative $100 par value
Jan. 5 Issued 15,000 shares of common stock for $80/share.
Feb. 8 Issued 7,000 shares of its preferred stock in exchange for land with a fair value of $900,000
Apr. 1 Purchased 1,000 shares of its common stock (for the treasury) at $80 per share.
May 9 Resold 500 shares of its common stock purchased on April 1 at $85 per share
June 2 Resold 400 shares of its common stock purchased on April 1 at $60 per share.
Dec. 31 Reported net income of $2,500,000
INSTRUCTIONS:
- Prepare the
journal entries to record the above transactions. - Prepare Ehrlich’s
stockholders’ equity section of itsbalance sheet as of Dec 31, 2020. Make sure you show all proper share information.
Stockholder's Equity
Stockholder equity, often known as shareholders' equity or owners' equity, is the number of assets left over for shareholders to use after all liabilities have been settled. It is determined by subtracting a company's total assets from its total liabilities, or alternatively by adding its share capital and retained earnings and deducting its treasury shares.
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