Your close friend Leslie Lazier is the owner and operator of Lazier Tech, Inc., which was organized in 2017. The company’s accountant resigned suddenly in early 2018 without leaving a contact number and Leslie was left with several unanswered questions as it relates to the composition of the company’s paid in capital and the total stockholders’ equity. At December 31, 2017, the Lazier Tech reported the following extract from the company’s balance sheet. Preferred stock, 6%, $40 par, 1,000,000 shares authorized, none issued $ 0. Common stock, $4 par, 600,000 shares authorized, 100,000 shares issued and outstanding 400,000 Paid-in capital in excess of par—common 120,000 Retained earnings 60,000 During 2018, the company completed the following selected transactions: a. Issued for cash 25,000 shares of preferred stock at par value. b. Issued for cash 40,000 shares of common stock at a price of $10 per share. c. Net income for the year was $240,000, and the company declared no dividends. As her friend, Leslie now seeks your advice. REQUIRED: 1. Prepare the Stockholders Equity Section of the company’s balance sheet at December 31, 2018 based on the information presented and include the following:  information on par values.  the number of shares authorized and issued where necessary  the sub total for the total paid in capital  total stockholders’ equity

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Legal Liability

Section: Chapter Questions

Problem 21RQSC

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Your close friend Leslie Lazier is the owner and operator of Lazier Tech, Inc., which was organized in 2017. The company’s accountant resigned suddenly in early 2018 without leaving a contact number and Leslie was left with several unanswered questions as it relates to the composition of the company’s paid in capital and the total stockholders’ equity. At December 31, 2017, the Lazier Tech reported the following extract from the company’s balance sheet.

Preferred stock, 6%, $40 par, 1,000,000 shares authorized, none issued $ 0. Common stock, $4 par, 600,000 shares authorized, 100,000 shares issued and outstanding 400,000 Paid-in capital in excess of par—common 120,000 Retained earnings 60,000

During 2018, the company completed the following selected transactions: a. Issued for cash 25,000 shares of preferred stock at par value. b. Issued for cash 40,000 shares of common stock at a price of $10 per share. c. Net income for the year was $240,000, and the company declared no dividends. As her friend, Leslie now seeks your advice.

REQUIRED: 1. Prepare the Stockholders Equity Section of the company’s balance sheet at December 31, 2018 based on the information presented and include the following:  information on par values.  the number of shares authorized and issued where necessary  the sub total for the total paid in capital  total stockholders’ equity

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