bl On January 1, 2016, Dr. Beth Hill started a new professional corporation, Bet
ID: 2339517 • Letter: B
Question
bl On January 1, 2016, Dr. Beth Hill started a new professional corporation, Beth Hill, P. C, to practice stock. On June 30, 2016, the accounting records showed the following amounts with an initial investment of $100,000 in exchange for 20,000 shares of $2 par value common Accounts Payable Accounts Recelvable Cash Common stock Additional paid-in capital Office Equipment Office Supplies Retained Earnings Notes Payable $48,100 57 $60,000 $3,500 $5,800 $10,000 Requirement: 1. Calculate the amounts for common stock and additional paid-in capital and prepare the journal entry (in Good Form) 2. Prepare a balance sheet as of June 30, 2016. (in Good Form #1 Answer (Show you work)Explanation / Answer
Solution:
Part 1 – Amount for common stock and additional paid in capital
Common Stock = 20,000 Shares x Par Value $2 = $40,000
Additional Paid in Capital = Total Amount Invested $100,000 – Common Stock $40,000 = $60,000
Journal Entry
General Journal
Debit
Credit
Cash
$100,000
Common Stock
$40,000
Additional Paid in Capital
$60,000
Part 2 – Balance Sheet
Balance Sheet as of June 30, 2016
$$
Assets:
Cash
$48,100
Accounts Receivable
$6,200
Office Supplies
$3,500
Office Equipment
$60,000
Total Assets
$117,800
Liabilities:
Accounts Payable
$2,000
Notes Payable
$10,000
Stockholder's Equity:
Common Stock
$40,000
Additional Paid in Capital
$60,000
Retained Earnings
$5,800
Total Liabilities and Stockholders' Equity
$117,800
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General Journal
Debit
Credit
Cash
$100,000
Common Stock
$40,000
Additional Paid in Capital
$60,000
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