The Business charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration:VIK purchased a piece of land from the original owner. In payment for the land, VIK issue 350,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of 1, 350,000The company sold 110,000 shares of common stock with $1 par valueIssued 20,000 shares of $16 par value preferred stock. Shares were issued at par. Earned net income of $100,000Dividend declared and paid - $0.15 per share on common stockDividend declared and paid - $10 per share on preferred stock Prepare the Journal entries and closing entries for the above transactionPrepare the owner’s equity section of the balance sheet based on the info above

Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Answered: The Business charter authorizes…

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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The Business charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration:

VIK purchased a piece of land from the original owner. In payment for the land, VIK issue 350,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of 1, 350,000
The company sold 110,000 shares of common stock with $1 par value
Issued 20,000 shares of $16 par value preferred stock. Shares were issued at par.

Earned net income of $100,000
Dividend declared and paid - $0.15 per share on common stock
Dividend declared and paid - $10 per share on preferred stock

Prepare the Journal entries and closing entries for the above transaction
Prepare the owner’s equity section of the balance sheet based on the info above

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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