Stockholders’ Equity: Transactions and Balance Sheet PresentationBeaker Corporation was organized on July 1, with an authorization of 50,000 shares of $5 no-par value preferred stock ($5 is the annual dividend) and 100,000 shares of $10 par value common stock. During July, the following transactions affecting stockholders’ equity occurred:July1Issued 31,000 shares of common stock at $21 cash per share. 12Issued 3,500 shares of common stock in exchange for equipment with a fair market value of $71,000. 15Issued 5,000 shares of preferred stock for cash at $40 per share. Requireda. Prepare journal entries to record the foregoing transactions.General JournalDateDescriptionDebitCreditJul.01 Paid-in-Capital in Excess of Par Value - Common Stock Issued shares of common stock. Jul.12 Common Stock Issued common stock for equipment. Jul.15 Issued shares of preferred stock. b. Prepare the stockholders’ equity section of the balance sheet at July 31. The net income for July is $52,000.Stockholders' Equity Paid in Capital Additional Paid-in-Capital Paid-in-Capital in Excess of Par value - Common Stock

The journal entries are prepared to keep the record of day to day transactions of the business.

Answered: Stockholders’ Equity: Transactions and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Stockholders’ Equity: Transactions and Balance Sheet Presentation

Beaker Corporation was organized on July 1, with an authorization of 50,000 shares of $5 no-par value preferred stock ($5 is the annual dividend) and 100,000 shares of $10 par value common stock. During July, the following transactions affecting stockholders’ equity occurred:

July	1	Issued 31,000 shares of common stock at $21 cash per share.
	12	Issued 3,500 shares of common stock in exchange for equipment with a fair market value of $71,000.
	15	Issued 5,000 shares of preferred stock for cash at $40 per share.

Required

a. Prepare journal entries to record the foregoing transactions.

General Journal
Date	Description	Debit	Credit
Jul.01

	Paid-in-Capital in Excess of Par Value - Common Stock
	Issued shares of common stock.
Jul.12
	Common Stock

	Issued common stock for equipment.
Jul.15

	Issued shares of preferred stock.

b. Prepare the stockholders’ equity section of the balance sheet at July 31. The net income for July is $52,000.

Stockholders' Equity
	Paid in Capital


	Additional Paid-in-Capital
	Paid-in-Capital in Excess of Par value - Common Stock

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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