(a)
Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend.
Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock.
Stated value: It refers to an amount per share, which is assigned by the board of directors to no par value stock.
Issue of common stock for non-cash assets or services: Corporations often issue common stock for the services received from attorneys or consultants as compensation, or for the purchase of non-cash assets such as land, buildings, or equipment.
To Journalize: The transaction, assume that the common stock has a par value of $5 per share and was issued for a total cash of $52,000.
(b)
To Journalize: The transaction, assume that the common stock has a stated value of $5 per share and was issued for a total cash of $52,000.
(c)
To Journalize: The transaction, assume that the common stock has no stated value or par value and was issued for a total cash of $52,000.
(d)
To Journalize: The transaction, assume that the common stock has a par value of $5 per share and was issued for service rendered by the attorney during incorporation been valued at $52,000.
(e)
To Journalize: The transaction, assume that the common stock has a par value of $5 per share and was issued for land worth $52,000
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Chapter 11 Solutions
Financial Accounting 9e Binder Ready Version + WileyPLUS Registration Card
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