The owners are desirous of comparing several financial transactions andpossible outcomes to assist in guiding their decision-making process. They assume that the company will be fomed on January 1, 2020 and that Mulatto Company's charter will authorize 1,000,000 shares of common stock and 400,000, $100 parvalue, 5% cumulative prefered stock. They have asked each student fromyour accourting course to prepare the company'sjoumal entries and statement of owner's equity. • Isued 45,500 shares of common stock. Stock has parvalue ofQ.30 per share and was issued at $30 per share. • Issued 8000 shares of prefered stock at parvalue as paymentin exchange for legal services • Exchanged 160,000 shares of commonstock for land with an Þppraised value of $400,000.00 and a building with an appraised vahe of $650.000.00. • EamedNet income $650,000.00. (please refer to table belowand use only the info in line with your surname initial in the blank/underlined space) • Paid dividends to preferred shareholders as well as $2 per share to common stockholders. A. Prepare the joumalentries with narations to record the following The issuances of stock. • Close out net income to retained eamings. • Dividend paid. • Close out dividendto retained eamings. B. Prepare Mulatto Company's Stockholders equity section of the balance sheet at December 31, 2020. (Hin!!) The following infomation must be clearly stated/shown: • infomation on parvalues, • the number of shares authorized andissued where necessary. • the sub total forthe total paid in capital. • Retained eamings. • totalstockholders' equity.
The owners are desirous of comparing several financial transactions andpossible outcomes to assist in guiding their decision-making process. They assume that the company will be fomed on January 1, 2020 and that Mulatto Company's charter will authorize 1,000,000 shares of common stock and 400,000, $100 parvalue, 5% cumulative prefered stock. They have asked each student fromyour accourting course to prepare the company'sjoumal entries and statement of owner's equity. • Isued 45,500 shares of common stock. Stock has parvalue ofQ.30 per share and was issued at $30 per share. • Issued 8000 shares of prefered stock at parvalue as paymentin exchange for legal services • Exchanged 160,000 shares of commonstock for land with an Þppraised value of $400,000.00 and a building with an appraised vahe of $650.000.00. • EamedNet income $650,000.00. (please refer to table belowand use only the info in line with your surname initial in the blank/underlined space) • Paid dividends to preferred shareholders as well as $2 per share to common stockholders. A. Prepare the joumalentries with narations to record the following The issuances of stock. • Close out net income to retained eamings. • Dividend paid. • Close out dividendto retained eamings. B. Prepare Mulatto Company's Stockholders equity section of the balance sheet at December 31, 2020. (Hin!!) The following infomation must be clearly stated/shown: • infomation on parvalues, • the number of shares authorized andissued where necessary. • the sub total forthe total paid in capital. • Retained eamings. • totalstockholders' equity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The owners are desirous of comparing several financial transactions andpossible
outcomes to assist in guiding their decision-making process. They assume that the
company will be fomed on January 1, 2020 and that Mulatto Company's charter
will authorize 1,000,000 shares of common stock and 400,000, $100 parvalue, 5%
cumulative preferred stock. They have asked each student fromyour accounting
course to prepare the company'sjoumal entries and statement of owner's equity.
• Isued 45,500 shares of common stock. Stock has parvalue of0.30
pershare and wasissued at $30 per share.
• Issued 8000 shares of preferred stock at parvalue as paymentin
exchange for legalservices
• Exchanged 160,000 shares of commonstock for land with an
þppraised value of $400,000.00 and a building with an appraised vale
of $650.000.00.
• Eamed Net income $650,000.00. (please refer to table below and
use only the info in line with your surname initial in the
blank/underlined space)
• Paid dividends to preferred shareholders as well as $2 per share to
common stockholders.
A. Prepare the joumal entries with namrations to record the following:
• The issuances ofstock.
• Close out net income to retained eamings.
• Dividend paid.
• Close out dividend to retained eamings.
B. Prepare Mulatto Company's Stockholders equity section ofthe balance sheet
at December 31, 2020. (Hint!!!!) The following infomation must be
clearly stated/shown:
• infomation onparvalues,
• the number ofshares authorized andissued where necessary.
• the sub total forthe totalpaidin capital.
• Retained eamings.
totalstockholders' equity.
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