Westby Corp., a high school uniform manufacturer, was authorized to issue an unlimited number of common shares. During January 2020, its first month of operations, the following selected transactions occurred: Jan.1 1,000 shares were issued to the organizers of the corporation. The total value of the shares was determined to be $12,700. 5 15,000 shares were sold to various shareholders for $14.20 each. 15 The board of directors declared a cash dividend of $0.82 per common share to shareholders of record on January 19, payable January 31. 20 4,000 shares were issued in exchange for land valued at $50,800. The shares were actively trading on this date at $12.20 per share. 31 Closed the Income Summary account, which showed a credit balance of $172,000. 31 Paid the dividends declared on January 15.Required:a. Journalize the above transactions. The Company does not use a Cash Dividends Account. b. Prepare the equity section of Westby’s balance sheet at January 31, 2020.c. What was the average issue price per common share? (Round your answer to 2 decimal places.)

Equity Section: Stockholders' equity, often known as owner's equity, is the portion of a balance…

Answered: Westby Corp., a high school uniform…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Westby Corp., a high school uniform manufacturer, was authorized to issue an unlimited number of common shares. During January 2020, its first month of operations, the following selected transactions occurred:

Jan.	1	1,000 shares were issued to the organizers of the corporation. The total value of the shares was determined to be $12,700.
	5	15,000 shares were sold to various shareholders for $14.20 each.
	15	The board of directors declared a cash dividend of $0.82 per common share to shareholders of record on January 19, payable January 31.
	20	4,000 shares were issued in exchange for land valued at $50,800. The shares were actively trading on this date at $12.20 per share.
	31	Closed the Income Summary account, which showed a credit balance of $172,000.
	31	Paid the dividends declared on January 15.

Required:
a. Journalize the above transactions. The Company does not use a Cash Dividends Account.
b. Prepare the equity section of Westby’s balance sheet at January 31, 2020.
c. What was the average issue price per common share? (Round your answer to 2 decimal places.)

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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