The ABC Corporation was formed on January 1, 2017. The three initial owners each invested $400,000 cash and each received 40,000 shares of $1 par value common stock. Below are selected transactions that were completed during January 2017. 1. Issue shares of common stock to the owners. 2. Borrowed $320,000 on a one-year note payable. 3. Purchased land by signing a $280,000 note payable. 4. Paid $40,000 of accounts payable. 5. Purchased two service vehicles for cash at a cost of $96,000 each. 6. Purchased $8,000 of supplies on credit. Question: Prepare the journal entries on ABC's books for each transaction.

The ABC Corporation was formed on January 1, 2017. The three initial owners each invested $400,000 cash and each received 40,000 shares of $1 par value common stock. Below are selected transactions that were completed during January 2017. 1. Issue shares of common stock to the owners. 2. Borrowed $320,000 on a one-year note payable. 3. Purchased land by signing a $280,000 note payable. 4. Paid $40,000 of accounts payable. 5. Purchased two service vehicles for cash at a cost of $96,000 each. 6. Purchased $8,000 of supplies on credit. Question: Prepare the journal entries on ABC's books for each transaction.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Cypress Corp. went into business on October 1, 2020. Cypress had the following transactions during 2020: Oct. 1 - Issued a total of 20 shares of stock to two stockholders for a total of $6,00O. • Oct. 1 - Borrowed $20,000 from the bank. No payments will be made on this loan until October 1, 2022, when $24,000 will be due. Oct. 12 - Purchased land for $8,000 in cash. • Nov. 1 - Purchased equipment for $12,000 in cash. The equipment is expected to last for four years with no salvage value. • Nov. 15 - Purchased $5,000 inventory, half in cash and half on account. • Dec. 1 - Purchased six months of insurance for $1,200. Dec. 10 - Sold $2,000 of inventory for $4,500 in cash. • Dec. 12 - Sold one-half of land for $5,000 in cash. Dec. 13 - Paid balance owed on accounts payable. Dec. 18 - Sold $1,500 of inventory for $2,500 on account. • Dec. 31 - Paid $1,000 in dividends. What were the net operating cash flows for Cypress during 2020? O $3,300 $800 O ($600) O ($1,700) None of the above
Pico Company was organized on January 1, 2015 with authorized capital of 100,000 shares of P200 par value. During 2015, Pico had the following transactions affecting stockholders' equity: Issued 25,000 shares at P220 a share January 10 March 25 Issued 1,000 shares for legal services when the fair value was P240 a share September 30 Issued 5,000 shares for a tract of land when the fair value was P260 a share. What amount should Pico report as additional paid in capital at December 31, 2015? O A. 840,000 O B. 800,000 O C. 540,000 O D. 500,000
When Jon Batiste incorporated, his corporation issued 150 shares from treasury for $12 per share to him. In 2017, the Jon sold half of his shares to another individual for $14 per share. In 2018, an employee purchased 20 shares from treasury for $16 per share. All shares are of the same class. Which one of the following amounts represents the per-share paid-up capital? $13.33 $11 $13.67 $15
Classic Automobiles of Huntsville Ltd. was formed on January 1, 2016, when Classic issued common shares for $300,000. Early in January 2016, Classic made the following cash payments: $150,000 for equipment $120,000 for inventory (four cars at $30,000 each) $20,000 for 2016 rent on a store building In February 2016, Classic purchased six cars for inventory on account. Cost of this inventory was $260,000 ($43,333.33 each). Before year-end, Classic paid $208,000 of this debt. Classic uses the FIFO method to account for inventory. During 2016, Classic sold eight vintage autos for a total of $500,000. Before year-end, Classic collected 80% of this amount. The business employs three people. The combined annual payroll is $95,000, of which Classic owes $4,000 at year-end. At the end of the year, Classic paid an income tax of $10,000. Late in 2016, Classic declared and paid cash dividends of $11,000. For equipment, Classic uses the straight-line depreciation method over five years with zero…
Cool Company has decided to take their company public on January 1, 2014. Cool company had 1,000 shares authorized. The following transactions occurred. a.) Jean grey issues 5,000 shares for $15 per share during their IPO on January 1, 2014. each share has a par value of $5. Record the journal entry for this transaction. Please label debits and credits and include classification of each account. b.) On January 1, 2015, Cool company bought back 2,000 shares from the open market at a price of $25 per share. Record the journal entry for this share repurchase. Label debits and credits and include classification of each account.
On July 1, 2018 Tam Company purchased 3,000 shares of Del Company capital stock as a temporary investment (trading securities) at $66.50 per share plus a commission of $30. On July 15, a 5 per cent stock dividend was received. Tam received a cash dividend of $0.60 per share on August 12, 2018. On November 1, Tam sold all of the shares for $72.20 per share, less a commission of $30. Prepare entries to record all of these transactions in Tam Company’s accounts.
Rios Co. is a regional insurance company that began operations on January 1, 2012. The following selected transactions relate to investments acquired by Rios Co., which has a fiscal year ending on December 31: Record these transactions on page 10: 20Y2 Feb. May July 1 Purchased 7,400 shares of Caldwell Inc. common stock at $38 per share plus a brokerage commission of $740. Caldwell has 100,000 shares of common stock outstanding. 1 Purchased securities of Holland Inc. as a trading investment for $93,687. 1 Sold 3,850 shares of Caldwell Inc. for $36 per share less a $105 brokerage commission. 31 Received an annual dividend of $0.25 per share on 3,550 shares of Caldwell Inc. stock. Nov. 15 Sold the remaining shares of Caldwell Inc. for $39 per share less a $85 brokerage commission. Dec. 31 The trading securities of Holland Inc. have a fair value on December 31 of $84,345. Record these transactions on page 11: 20Y3 Apr. 1 Purchased securities of Fuller Inc. as a trading investment for…
Glen Tay Inc. had issued 24,000 shares of its no-par common shares on April 1, 2017 for property with an appraisal value of $320,000. The common shares of the company were being traded at $13.15 each on that day. What is the journal entry required to record the issuance of the shares? Select one: a. DR Common Shares Receivable, $320,000; CR Common Share Capital, $315,600; CR Gain On Issue Of Shares, $4,400. b. DR Common Shares Receivable, $320,000; CR Common Share Capital, $315,600; CR Contributed Surplus - Common Shares, $4,400. c. DR Property, $320,000; CR Common Share Capital, $315,600; CR Retained Earnings -Issue Of Shares, $4,400. d. DR Property, $320,000; CR Common Share Capital, $315,600; CR Gain On Issue Of Shares, $4,400. e. None of the above entries.
On January 1, 2013, an investor purchases 15,000 common shares of an investee at $9 (cash) per share. The shares represent 20% ownership in the investee. The investee shares are not considered "marketable" because they do not trade on an active exchange. On January 1, 2013, the book value of the investee's assets and liabilities equals $600,000 and $150,000, respectively. On that date, the appraised fair values of the investee's identifiable net assets approximated the recorded book values. During the year ended December 31, 2013, the investee company reported net income equal to $22,500 and dividends equal to $12,000. Noncontrolling investment accounting (price equals book value)Assume the investor can exert significant influence over the investee. Determine the balance in the "Investment in Investee" account at December 31, 2013. $3,600 $137,100 $135,000 $690,750
Cool Company has decided to take their company public on January 1, 2014. Cool company had 1,000 shares authorized. The following transactions occurred. c.) On March 30, 2015, Cool company declared a dividend of $1 per share. Record the journal entry for this transaction. Label debits and credits and include classification of each account. d.) on April 30, 2015, cool company paid the dividend to shareholders. Record the journal entry for the dividend payment. Label debits and credits and include classification of each account.
BARK Corporation acquired 10,000 Company shares on February 5, 2016 at P50 which include P10 per share broker's fees and commissions, A P50,000 cash dividends were received from MEOW Company on March 20, 2016. These dividends were declared on January 5 payable to shareholders as of February 10. MEOW Company shares were split 2 for 1 on November 1. The shares were selling at P32 per share on December 31, 2016. The investments were designated as FVPL. How much should be recognized as dividend income?