There are some owners who are desirous about comparing many financial transactions and possible outcomes to assist in their decision-making process. These individuals assumes that the business will be formed around January 1st, 2019, and that Hraesvelgr Company’s charter will authorize about 1000000 shares of common stock and 400000, $100 par value, 5% cumulative preferred stock. Issued 15000 shares of common stock. Stock has par value of $0.10 per share and was issued at $30 per share. Issued 5000 shares of preferred stock at par value as payment in exchange for legal services. Exchanged 120,000 shares of common stock for land with an appraised value of $300,000 and a building with an appraised value of $500,000. Earned Net Income $600,000 Paid dividends to preferred shareholders as well as $2 per share to common stockholders. Answer the following questions: Prepare the journal entries with narrations to record the following: insurances of stock, close out net income to retained earnings, dividend paid and close out dividend to retained earnings. Prepared Hraesvelgr Company’s Stockholders Equity Section of the Balance Sheet at December 31st 2019. It must contain the following: information on par values, the number of shares authorized and issued where necessary, the sub total for the total paid in capital, Retained earnings and total stockholders’ equity.

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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There are some owners who are desirous about comparing many financial transactions and possible outcomes to assist in their decision-making process. These individuals assumes that the business will be formed around January 1st, 2019, and that Hraesvelgr Company’s charter will authorize about 1000000 shares of common stock and 400000, $100 par value, 5% cumulative preferred stock.

Issued 15000 shares of common stock. Stock has par value of $0.10 per share and was issued at $30 per share.
Issued 5000 shares of preferred stock at par value as payment in exchange for legal services.
Exchanged 120,000 shares of common stock for land with an appraised value of $300,000 and a building with an appraised value of $500,000.
Earned Net Income $600,000
Paid dividends to preferred shareholders as well as $2 per share to common stockholders.

Answer the following questions:

Prepare the journal entries with narrations to record the following: insurances of stock, close out net income to retained earnings, dividend paid and close out dividend to retained earnings.

Prepared Hraesvelgr Company’s Stockholders Equity Section of the Balance Sheet at December 31st 2019. It must contain the following: information on par values, the number of shares authorized and issued where necessary, the sub total for the total paid in capital, Retained earnings and total stockholders’ equity.

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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