The Smallman Corporation was organized on January 1, 2006. It is authorized to issue 1,000,000 shares of common stock with a par value of $1 per share and 10,000 shares of $100 par value, 10% non-cumulative preferred stock. The following equity transactions occurred during the first year. Jan 10 Issued 80,000 shares of common stock for cash at $3 per share Feb 1 Issued 1,000 shares of preferred stock for a building having a fair market value of $125,000. Mar 1 Issued 1,000 shares of preferred stock for cash at $125 per share Apr 1 Issued 24,000 shares of common stock for land. The asking price for The land was $90,000. The fair market value was $80,000. May 1 Issued 80,000 shares of common stock for cash at $4 per share Aug 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for services rendered in helping the company organize. Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share Dec. 31 Closed-out $1,500,000 in Revenue and $645,000 in operating expenses for 2008. Net income was then closed-out to Retained Earnings. Required: Journalize all transactions. Prepare the Stockholder’s Equity section of the Balance Sheet
Exercise 11.1
The Smallman Corporation was organized on January 1, 2006. It is authorized to issue 1,000,000 shares of common stock with a par value of $1 per share and 10,000 shares of $100 par value, 10% non-cumulative
Jan 10 Issued 80,000 shares of common stock for cash at $3 per share
Feb 1 Issued 1,000 shares of preferred stock for a building having a fair market value of $125,000.
Mar 1 Issued 1,000 shares of preferred stock for cash at $125 per share
Apr 1 Issued 24,000 shares of common stock for land. The asking price for
The land was $90,000. The fair market value was $80,000.
May 1 Issued 80,000 shares of common stock for cash at $4 per share
Aug 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for services rendered in helping the company organize.
Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share
Dec. 31 Closed-out $1,500,000 in Revenue and $645,000 in operating expenses for
2008. Net income was then closed-out to
Required:
- Journalize all transactions.
- Prepare the
Stockholder’s Equity section of the Balance Sheet
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