Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock: Common stock, $1 par value, 200,000 shares. Preferred stock, $10 par value, 6 percent, 50,000 shares. During January and February, the following stock transactions were completed: Collected $784,000 cash and issued 28,000 shares of common stock. Issued 19,000 shares of preferred stock at $38 per share; collected in cash. Net income for the year was $58,000; cash dividends declared and paid at year-end were $12,000. Required: Prepare the stockholders’ equity section of the balance sheet at December 31.

Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock: Common stock, $1 par value, 200,000 shares. Preferred stock, $10 par value, 6 percent, 50,000 shares. During January and February, the following stock transactions were completed: Collected $784,000 cash and issued 28,000 shares of common stock. Issued 19,000 shares of preferred stock at $38 per share; collected in cash. Net income for the year was $58,000; cash dividends declared and paid at year-end were $12,000. Required: Prepare the stockholders’ equity section of the balance sheet at December 31.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter13: Corporations: Organization, Stock Transactions, And Dividends

Section: Chapter Questions

Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...

See similar textbooks

Related questions

Q: Eastport Incorporated was organized on June 5, Year 1. It was authorized to issue 390,000 shares of…

A: Stockholders' equity is the assets remaining in a business after all liabilities have been settled.

Q: 1) The following transactions took place in June for the Holista Corporation: June 1 Issued 1,000…

A: A journal entry is used to record day-to-day transactions of the business by debiting and crediting…

Q: Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $2 par…

A: Dividends can only be declared if the corporation has sufficient unrestricted retained earnings. On…

Q: North Wind Aviation received its charter during January authorizing the following capital stock:…

A: Total stockholders' equity comprises of the paid in capital and retained earnings of the…

Q: Eastport Inc. was organized on June 5, Year 1. It was authorized to issue 370,000 shares of $9 par…

Q: 20. The Delta Sunrise Corporation is incorporated under the laws of Mississippi. The certificate of…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: When Wisconsin Corporation was formed on January 1, the corporate charter provided for 94,200 shares…

A: Common stock: These are the ordinary shares that a corporation issues to the investors in order to…

Q: On January 1, 2021 a corporation was organized. The firm was authorized to Issue 150,000 shares of…

A: Stockholder's equity at the end of 2021 = Common stock + Paid in capital in excess of par common…

Q: King Corporation began operations in January, year 1. The charter authorized the following share…

A: Journal entry is the procedure for initially documenting commercial transactions in the books of…

Q: Sunshine Corp. was organized on Jan. 1 with authorization of 20,000 shares of $5 preferred stock,…

A: Journal is the book where transactions are originally recorded. Further, a journal entry is used to…

Q: When Wisconsin Corporation was formed on January 1, the corporate charter provided for 86,000 shares…

Q: Fortuna Company is authorized to issue 1,000,000 shares of $1 par value common stock. In its first…

A: Shares can be referred to as the small denominations of the share capital of a company. The shares…

Q: Worldwide Company obtained a charter from the state in January that authorized 200,000 shares…

Question

Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock:

Common stock, $1 par value, 200,000 shares.

Preferred stock, $10 par value, 6 percent, 50,000 shares.

During January and February, the following stock transactions were completed:

Collected $784,000 cash and issued 28,000 shares of common stock.
Issued 19,000 shares of preferred stock at $38 per share; collected in cash.

Net income for the year was $58,000; cash dividends declared and paid at year-end were $12,000.

Required:

Prepare the stockholders’ equity section of the balance sheet at December 31.

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Current liabilities, Provisions and Contingencies

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

Wingra Corporation was organized in March. It is authorized to issue 500,000 shares of $100 par value 8% preferred stock. It is also authorized to issue 750,000 shares of $1 par value common stock. In its first year, the corporation has the following transactions: Journalize the transactions.
St. Marie Company is authorized to issue 1,000,000 shares of $5 par value preferred stock, and 5,000,000 shares of $1 stated value common stock. During the year, the company has the following transactions: Journalize the transactions.
Fortuna Company is authorized to issue 1,000,000 shares of $1 par value common stock. In its first year, the company has the following transactions: Journalize the transactions and calculate how many shares of stock are outstanding at August 3.
The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the current fiscal year: During the year, the corporation completed a number of transactions affecting the stockholders equity. They are summarized as follows: a. Issued 500,000 shares of common stock at 8, receiving cash. b. Issued 10,000 shares of preferred 1% stock at 60. c. Purchased 50,000 shares of treasury common for 7 per share. d. Sold 20,000 shares of treasury common for 9 per share. e. Sold 5,000 shares of treasury common for 6 per share. f. Declared cash dividends of 0.50 per share on preferred stock and 0.08 per share on common stock. g. Paid the cash dividends. Instructions Journalize the entries to record the transactions. Identify each entry by letter.
Anslo Fabricating, Inc. is authorized to issue 10,000,000 shares of $5 stated value common stock. During the year, the company has the following transactions: Journalize the transactions.
Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock: Common stock, $1 par value, 200,000 shares. Preferred stock, $10 par value, 6 percent, 50,000 shares. During January and February, the following stock transactions were completed: a. Collected $784,000 cash and issued 28,000 shares of common stock. b. Issued 19,000 shares of preferred stock at $38 per share; collected in cash. Net income for the year was $58,000; cash dividends declared and paid at year-end were $12,000. Required: Prepare the stockholders' equity section of the balance sheet at December 31. Contributed Capital: SHELBY CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Total Contributed Capital Total Stockholders' Equity
Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock: Common stock, $1 par value, 200,000 shares. Preferred stock, $10 par value, 6 percent, 50,000 shares. During January and February, the following stock transactions were completed: a. Collected $900,000 cash and issued 30,000 shares of common stock. b. Issued 20,000 shares of preferred stock at $40 per share; collected in cash. Net income for the year was $60,000; cash dividends declared and paid at year-end were $11,000. Required: Prepare the stockholders' equity section of the balance sheet at December 31. SHELBY CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital:
Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock Common stock, $1 par value, 200,000 shares. Preferred stock. $10 par value, 6 percent. 50,000 shares. During January and February, the following stock transactions were completed a Collected $676,000 cash and issued 26,000 shares of common stock b Issued 18,000 shares of preferred stock at $36 per share, collected in cash Net income for the year was $56.000 cash dividends declared and paid at year-end were $10,000 Required: Prepare the stockholders' equity section of the balance sheet at December 31 Contributed Capital Common Stock Preferred Stock Answer is complete but not entirely correct. SHELBY CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Additional Paid-In Capital, Common Stock Additional Pad-In Capital, Preferred Stock Total Contributed Capital Retained Earnings Total Stockholders'…
Shelby Corporation was organized in January to operate an air-conditioning sales and service business. The charter issued by the state authorized the following capital stock: Common stock, $1 par value, 200o,000 shares. Preferred stock, $10 par value, 6 percent, 50,000 shares. During January and February, the following stock transactions were completed: led a. Collected $576,000 cash and issued 24,000 shares of common stock. b. Issued 17,000 shares of preferred stock at $34 per share; collected in cash. Net income for the year was $54,000; cash dividends declared and paid at year-end were $11,000. Required: Prepare the stockholders' equity section of the balance sheet at December 31. SHELBY CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital: 24 195,000 O Common Stock 29,000 Preferred Stock Additional Paid-In Capital, Common Stock 812,000 Additional Paid-In Capital, Preferred Stock 565,500 Total Contributed Capital 1,601,500 Retained Earnings…
Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $1 parvalue. During its first year, the following selected transactions were completed:a. Issued 6,000 shares of common stock for cash at $20 per share.b. Issued 2,000 shares of common stock for cash at $23 per share.Required:1. Show the effects of each transaction on the accounting equation.2. Give the journal entry required for each of these transactions.3. Prepare the stockholders’ equity section as it should be reported on the year-end balancesheet. At year-end, the accounts reflected a profit of $100.4. Incentive Corporation has $30,000 in the company’s bank account. What is the maximumamount of cash dividends the company can declare and distribute?
A corporation was organized on January 1 of the current year, with an authorization of 10,000 shares of $4 preferred stock, $10 par, and 50,000 shares of $10 par common stock. The following selected transactions were completed during the first year of operations: Jan. 1 Issued 5,000 shares of Preferred stock at $20 per share for cash. 15 Issued 200 shares of common stock at par to an attorney in payment of legal fees. The value of the stock was at the time of payment was $25 per share. Feb. 1 Issued 20,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $60,000, $20,000, and $40,000 respectively. Mar. 1 Issued 2,000 shares of common stock at $16 for cash.
Lucas Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following: Common stock, $8 par value, 111,000 shares authorized Preferred stock, 14 percent, par value $10 per share, 4,500 shares authorized During the year, the following transactions took place in the order presented: a. Sold and issued 21,500 shares of common stock at $20 cash per share. b. Sold and issued 2,400 shares of preferred stock at $24 cash per share. c. At the end of the year, the company reported net income of $41,500. No dividends were declared. Required: 1. Prepare the stockholders' equity section of the balance sheet at the end of the year. Stockholders' equity: Contributed capital: Total contributed capital Total stockholders' equity LUCAS COMPANY Balance Sheet (Partial) At December 31, This year $