Shark School Supply Corporation was organized in 2011. It was authorized to issu

Question

Shark School Supply Corporation was organized in 2011. It was authorized to issue 200,000 shares of no-par common stock with a stated value of $5 per share, and 40,000 shares of $100 par value, 6 percent noncumulative preferred stock. On March1, the company issued 60,000 shares of its commo stock for $15 per share and 8,000 shares of its preferred stock for $100 per share.

1. Record the issuance of the stock in t-accounts

2. Prepare the stockholders' equity section of Shark School Supply Corporation's balance sheet as it would appear immediately after the company issued the common and preferred stock.

Explanation / Answer

1) credit cash = 60000 * 15 = 900,000

credit equity = 900,000

2)

stock holder equity section

common stock = 900,000

preffered stock = 800,000

Net equity = 1,700,000

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