shgnmer Problem 12-1BB HO The corporation\'s charter Lasser Corporation began op
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shgnmer Problem 12-1BB HO The corporation's charter Lasser Corporation began operations on October 1, authorized 300,000 shares of $8 par value common stock. Laser engaged in the following transactions during its first quarter: Oet 1 Issued 50,000 shares of common stock, for a total of $500,000. Paid an attorney $32,000 to help organize the corporation and obtain the corporate charter from the state. 1 2 Issued 80,000 shares of common stock for a total of $960,00o. respectively in exchange for issuing a 6-month note of $40,000 and 18,750 common shares. Dec 30 The board of directors declared a cash dividend of 40 cents (5.40) per share. Complete the closing entry for the result of Revenues of $480,000 and Expenses of $340,000 (assume revenues and expenses have already been closed). 30 Instructions: 1. Record all transactions a 2-column joumal in great form 2. Prepare a set of t-accounts and post each entry-be sure to label each entry 3. Complete a classified Balance Sheet in great form.Explanation / Answer
JOURNAL ENTRY Date Account Title and Explanation Debit Credit October 1 Cash $500,000 Common stock $500,000 (To record issue of 50000 common shares for $10 at par) October 1 Organization cost $32,000 Cash $32,000 (To record cost incurred in organizing corporation) October 2 Cash $960,000 Common Stock $800,000 (80000*10) Additional paid up capital $160,000 (960000-800000) (To record issue of 80000 common shares for $12 each) October 12 Building $108,000 Equipment $100,000 Notes payable $40,000 Common Stock $187,500 Discount on issue of shares $19,500 (187500+40000-108000-100000) (To record purchase of Building & Equipment) against notes payable and issue of 18750 shares at discount) December 30 Retained Earnings $ 59,500 Dividend payable $ 59,500 ($0.4*(50000+80000+18750) (To record dividend of $0.4 per share declared) December 30 Income Summary $140,000 (480000-340000) Retained Earnings $140,000 (To record closure of Inome summary account) T-Accounts Cash Date Description Debit Credit October 1 CommonStock $500,000 October 1 Organization cost $32,000 October 2 Issue of commonstock $960,000 Ending Balance $1,428,000 Organization cost Date Description Debit Credit October 1 Cash $32,000 Building Date Description Debit Credit October 12 Purchase $108,000 Equipment Date Description Debit Credit October 12 Purchase $100,000 Notes payable Date Description Debit Credit October 12 Purchase of building & equipment $40,000 Dividend payable Date Description Debit Credit December 30 Retained Earnings $ 59,500 Common Stock Date Description Debit Credit October 1 Cash $500,000 October 2 Cash $800,000 October 12 Purchase of building & Equipment $187,500 Ending Balance $1,487,500 Additional paid up capital Date Description Debit Credit October 2 Cash $160,000 Discount on issue of shares Date Description Debit Credit October 12 Purchase of building &Equipment $19,500 Retained Earnings Date Description Debit Credit December 30 Retained Earnings $ 59,500 December 30 Income Summary $140,000 Ending Balance $80,500 Income Summary Date Description Debit Credit December 30 Retained earnings $140,000
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