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. Issued 30% of authorised shares of class A common stock. Stock has par value of $20.00 per share and was issued at $28.00 per share. Issued 30% of authorised shares of no-par class B stock at $25.00. Issued 50% of authorised shares of preferred stock at par value $110.00. Exchanged 50% of authorised shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00. Earned Net income 1,500,000.00. A. 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.
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.
Issued 30% of authorised shares of class A common stock. Stock has par value of $20.00 per share and was issued at $28.00 per share.
Issued 30% of authorised shares of no-par class B stock at $25.00.
Issued 50% of authorised shares of preferred stock at par value $110.00.
Exchanged 50% of authorised shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00.
Earned Net income 1,500,000.00.
A. Prepare the
• The issuances of stock.
• Close out net income to
• Dividend declared.
• Close out dividend to retained earnings.
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