The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic Bookstore Company's charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A - voting rights and 500,000 shares class B -nonvoting rights) and 400,000, SX par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company's journal entries and statement of owner's equity based on the following information. A. Issued 60% shares of class A common stock. Stock has par value of $48 per share and was issued at $105 per share B. Issued 60% shares of no-par class B stock $98 C. Issued 20% shares of preferred stock at par value $168 D. Exchanged 40% shares of class A common stock for Office Furniture and Equipment with an appraised value of $4,000,000.00 Motor Truck with an appraised value of $ 10,000,000.00. E. Earned Net income $ 1,450,000.00 F. Declared interim dividends for preferred shareholders as well as S.80 per share to common stockholders. Prepare the journal entries with narrations to record the following: • The issuances of stock. • Close out net income to retained earnings. Dividend declared.
The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic Bookstore Company's charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A - voting rights and 500,000 shares class B -nonvoting rights) and 400,000, SX par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company's journal entries and statement of owner's equity based on the following information. A. Issued 60% shares of class A common stock. Stock has par value of $48 per share and was issued at $105 per share B. Issued 60% shares of no-par class B stock $98 C. Issued 20% shares of preferred stock at par value $168 D. Exchanged 40% shares of class A common stock for Office Furniture and Equipment with an appraised value of $4,000,000.00 Motor Truck with an appraised value of $ 10,000,000.00. E. Earned Net income $ 1,450,000.00 F. Declared interim dividends for preferred shareholders as well as S.80 per share to common stockholders. Prepare the journal entries with narrations to record the following: • The issuances of stock. • Close out net income to retained earnings. Dividend declared.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Prepare the journal entries with narrations to record the following:
• The issuances of stock.
• Close out net income to retained earnings.
• Dividend declared.
• Close out dividend to retained earnings.
Prepare the company's Stockholders equity section of the balance sheet at December 31, 2020.
The following information must be clearly stated/shown:
• information on par or par values for all classes of shares which must be shown separately.
• the number of shares authorized and issued where necessary.
• the sub total for the total paid in capital.
• Retained earnings.
• total stockholders' equity
Transcribed Image Text:The owners are desirous of comparing serval financial transactions and possible outcomes to
assist in guiding their decision-making process. They assume that the company will be formed
on January 1, 2020. In addition, E&B Comic Bookstore Company's charter will authorize
1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -
voting rights and 500,000 shares class B-nonvoting rights) and 400,000, $X par value (see info
below), 5% cumulative preferred stock. They have asked each student from your accounting
course to prepare the company's journal entries and statement of owner's equity based on the
following information.
A. Issued 60% shares of class A common stock. Stock has par value of $48 per share and was
issued at $105 per share
B. Issued 60% shares of no-par class B stock $98
C. Issued 20% shares of preferred stock at par value $168
D. Exchanged 40% shares of class A common stock for Office Furniture and Equipment with an
appraised value of $4,000,000.00 Motor Truck with an appraised value of $ 10,000,000.00.
E. Earned Net income $ 1,450,000.00
F. Declared interim dividends for preferred shareholders as well as S.80 per share to common
stockholders.
Prepare the journal entries with narrations to record the following:
• The issuances of stock.
• Close out net income to retained earnings.
• Dividend declared.
• Close out dividend to retained earnings.
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