B-Mobile Wireless needed additional capital to expand, so the business incorpora

Question

B-Mobile Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes B-Mobile to issue 70,000 shares of 5%, $100-par preferred stock, and 110,000 shares of no-par common stock. B-Mobile completed the following transactions;Oct 2 Issued 19,000 shares of common stock for equipment with a market value of $110,000.;6 Issued 800 shares of preferred stock to acquire a patent with a market value of $80,000.;9 Issued 15,000 shares of common stock for cash of $90,000.;Requirements;1. Record the transactions in the general journal.;2. Prepare the stockholders? equity section of the B-Mobile balance sheet at October 31. The ending balance of Retained earnings is $92,000.

Explanation / Answer

R1

1. Equipment 110000
            Common stock 140000
to record acquisition of equipment through issuance of common stock

2. Patent 80000
                Preferred stock 80000
   to record patent acquired through issuance of preferred stock

3. Cash 90000
             Common stock 90000
#to recorded issuance of common stock for cash

R2

Stockholders' equity

Paid in Capital

Preferred Stock, $100 par, 5%, 80000

Common stock                        200,000
retained earnings                      124,000

Total stock holders’ equity        $504,000

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