Chelce McKinney answer rating percentage100% - 7h 49m left to answer Mary Corpor
ID: 2364925 • Letter: C
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Chelce McKinney answer rating percentage100% - 7h 49m left to answer Mary Corporation is authorized to issue 20,000 shares of $50 par value, 10% preferred stock and 125,000 shares of $3 par value common stock. On January 1, 2012, the ledger contained the following stockholders' equity balances. Preferred stock (10,000 shares) $500,00, Paid-in Capital in Excess of Par- Preferred stock $75,000, Common stock (70,000 shares) $210,000, Paid-in Capital in Excess of Par- Common stock $700,000, Retained Earnings $300,000. During 2012, the following transactions occured. feb1. issued 2,000 shares of preferred stock for land haveing a fair value of $125,000. mar1. issued 1000 shares of preferred stock for cash at $65 per share. jul1. issued 16000 shares of common stock for cash at $7 per share. sept1. issued 400 shares of preferred stock for a patent. The asking price of the patent was $30,000. Market values were preferred stock $70 and patent indeterminable. dec1. issued 8,000 shares of common stock for cash at $7.50 per share. dec31. net income for the year was $260,000. No dividends were declared. a.. prepare the stockholders' equity section at december 31, 2012Explanation / Answer
ANswer:-
eb. 1 Issued 2,000 shares of preferred stock for land having a fair value of $125,000.
Dr Land 125,000
Cr Preferred Stock 100,000 (2,000 x $50 par value)
Cr Paid-In Capital in Excess of Par, Preferred Stock 25,000
Mar. 1 Issued 1,000 shares of preferred stock for cash at $65 per share.
Dr Cash 65,000
Cr Preferred Stock 50,000
Cr Paid-In Capital in Excess of Par, Preferred Stock 15,000
Apr. 1 Issued 16,000 shares of common stock for cash at $7 per share.
Dr Cash 112,000
Cr Paid-In Capital in Excess of Par, Common Stock 64,000
Cr Common Stock 48,000
Sept. 1 Issued 400 shares of preferred stock for a patent. The asking price of the patent was $30,000. Market values were preferred stock $70 and patent indeterminable.
Since the market price of the patent is indeterminable, the market price of the stock is the cost of the patent.
Dr Patent 28,000
Cr Preferred Stock 20,000
Cr Paid-In Capital in Excess of Par, Preferred Stock 8,000
Dec. 1 Issued 8,000 shares of common stock for cash at $7.50 per share.
Dr Cash 60,0000
Cr Paid-In Capital in Excess of Par, Common Stock 36,000
Cr Common Stock 24,000
Dec. 31 Net Income for the year was $260,000. No dividends were declared.
Closing Entry
Dr Income Summary 260,000
Cr Retained Earnings 260,000
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