Required information[The following information applies to the questions displayed below.]Homestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash:• 830,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2019, at $17.00per share.• 210,000 shares of $110 par value, 8.50% cumulative, preferred stock were authorized; 57,000 shares were issued onJanuary 1, 2019, at $140 per share.Net income for the years ended December 31, 2019 and 2020 was $1,380,000 and $2,570,000, respectively.• No dividends were declared or paid during 2019. However, on December 28, 2020, the board of directors ofHomestead declared dividends of $1,750,000, payable on February 12, 2021, to holders of record as of January 19,2021.Required:1. Use the horizontal model for the issuance of common stock and preferred stock on January 1, 2019. Indicate the financial statementeffect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)Balance SheetIncome StatementAssetsLiabilitiesStockholders' EquityNet IncomeRevenuesExpenses= 2. Use the horizontal model for the declaration of dividends on December 28, 2020. Indicate the financial statement effect. (Enterdecreases with a minus sign to indicate a negative financial statement effect.)Balance SheetIncome StatementAssetsLiabilitiesStockholders' EquityNet IncomeRevenuesExpenses3. Use the horizontal model for the payment of dividends on February 12, 2021. Indicate the financial statement effect. (Enterdecreases with a minus sign to indicate a negative financial statement effect.)Balance SheetIncome StatementAssetsLiabilitiesStockholders' Equity -Net IncomeRevenuesExpenses+

Solution- First, we must know the exact value of the shares. To get it, we must multiply the amount…

tequired information The following information applies to the questions displayed below.] Homestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 830,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2019, at $17.00 per share. 210,000 shares of S110 par value, 8.50% cumulative, preferred stock were authorized; 57,000 shares were issued on January 1, 2019, at $140 per share. Net income for the years ended December 31, 2019 and 2020 was $1,380,000 and $2,570,000, respectively. No dividends were declared or paid during 2019. However, on December 28, 2020, the board of directors of Homestead declared dividends of $1,750,000, payable on February 12, 2021, to holders of record as of January 19, 2021.

tequired information The following information applies to the questions displayed below.] Homestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 830,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2019, at $17.00 per share. 210,000 shares of S110 par value, 8.50% cumulative, preferred stock were authorized; 57,000 shares were issued on January 1, 2019, at $140 per share. Net income for the years ended December 31, 2019 and 2020 was $1,380,000 and $2,570,000, respectively. No dividends were declared or paid during 2019. However, on December 28, 2020, the board of directors of Homestead declared dividends of $1,750,000, payable on February 12, 2021, to holders of record as of January 19, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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