Senario The company is desirous of comparing serval financial transactions and possible outcomes to assist in guiding its decision-making process. It is assumed that the company will be formed on January 1, 2021 and registered as Osbourne Corporation. The company’s charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative preferred stock. You are to prepare the company’s journal entries and statement of owner’s equity based on the following information Issued 80000 shares of common stock. Stock has par value of 0.50 per share and was issued at $30 per share. Issued 12000 shares of preferred stock at par value as payment in exchange for legal services. Earned Net income of $82,0000. Paid dividends to preferred shareholders as well as $2 per share to common stockholders Requirement: Using the information above and as a guide to answer following Questions A. Prepare the journal entries with narrations to record the following: The issuances of stock. Close out net income to retained earnings. Dividend paid. Close out dividend to retained earnings. B. Prepare Osbourne Corporation Stockholders equity section of the balance sheet at December 31, 2021. (Hint!!!!!!!) The following information must be clearly stated/shown: information on par values, the number of shares authorized and issued where necessary. the sub total for the total paid in capital. Retained earnings. total stockholders’ equity.
Senario The company is desirous of comparing serval financial transactions and possible outcomes to assist in guiding its decision-making process. It is assumed that the company will be formed on January 1, 2021 and registered as Osbourne Corporation. The company’s charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative preferred stock. You are to prepare the company’s journal entries and statement of owner’s equity based on the following information Issued 80000 shares of common stock. Stock has par value of 0.50 per share and was issued at $30 per share. Issued 12000 shares of preferred stock at par value as payment in exchange for legal services. Earned Net income of $82,0000. Paid dividends to preferred shareholders as well as $2 per share to common stockholders Requirement: Using the information above and as a guide to answer following Questions A. Prepare the journal entries with narrations to record the following: The issuances of stock. Close out net income to retained earnings. Dividend paid. Close out dividend to retained earnings. B. Prepare Osbourne Corporation Stockholders equity section of the balance sheet at December 31, 2021. (Hint!!!!!!!) The following information must be clearly stated/shown: information on par values, the number of shares authorized and issued where necessary. the sub total for the total paid in capital. Retained earnings. total stockholders’ equity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Senario
- The company is desirous of comparing serval financial transactions and possible outcomes to assist in guiding its decision-making process. It is assumed that the company will be formed on January 1, 2021 and registered as Osbourne Corporation. The company’s charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative
preferred stock . You are to prepare the company’sjournal entries and statement of owner’s equity based on the following information
- Issued 80000 shares of common stock. Stock has par value of 0.50 per share and was issued at $30 per share.
- Issued 12000 shares of preferred stock at par value as payment in exchange for legal services.
- Earned Net income of $82,0000.
- Paid dividends to preferred shareholders as well as $2 per share to common stockholders
Requirement:
Using the information above and as a guide to answer following Questions
A. Prepare the journal entries with narrations to record the following:
- The issuances of stock.
- Close out net income to
retained earnings . - Dividend paid.
- Close out dividend to retained earnings.
B. Prepare Osbourne Corporation
-
- information on par values,
- 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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