Welcome to Westonci.ca, where you can find answers to all your questions from a community of experienced professionals. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.
Sagot :
Answer:
a. See the journal entries below.
b. Stockholders' equity = $3,766,000
Explanation:
Note: There are little errors in this question where dollar signs are used as figures. These are however corrected before answering the question. The complete question with the correction is therefore presented as follows:
Stockholders' Equity: Transactions and Balance Sheet Presentation Torey Corporation was organized on April 1. with an authorization of 25,000 shares of six percent, $50 par value preferred stock and 200,000 shares of $5 par value common stock. During April, the following transactions affecting stockholders' equity occurred:
Apr. 1 Issued 80,000 shares of common stock at $40 cash per share:
3 Issued 2,000 shares of common stock to attorneys and promoters in exchange for their services in organizing the corporation. The services were valued at $31,000
8 Issued 3,000 shares of common stock in exchange for equipment with a fair market value of $55,000
20 Issued 6,000 shares of preferred stock for cash at $80 per share.
Required :
a. Prepare journal entries to record the above transactions.
b. Prepare the stockholders' equity section of the balance sheet at April 30.
Explanation of the answers is now given as follows:
a. Prepare journal entries to record the above transactions.
Let APIC represents additional paid in capital, the journal entries can be prepared as follows:
Date Particulars Dr ($) Cr ($)
Apr. 1 Cash (80,000 * $40) 3,200,000
Common stock (80,000 * $5) 400,000
APIC - Common stock 2,800,000
(To record common stock issued in excess of par value.)
Apr. 3 Attorney and promoters service exp. 31,000
Common stock (2,000 * $5) 10,000
APIC - Common stock 21,000
(To record common stock issued to attorneys and promoters for services at a premium.)
Apr. 8 Equipment (Fair value) 55,000
Common stock (3,000 * 5) 15,000
APIC - Common stock 40,000
(To record common stock issued for equipment at a premium.)
Apr. 20 Cash (6,000 * $80) 480,000
Preferred stock (6,000 * $50) 300,000
APIC - Preferred stock 180,000
(To record preferred stock issued in excess of par value.)
b. Prepare the stockholders' equity section of the balance sheet at April 30.
Using the figures from the journal entries above, this can be prepared as follows:
Torey Corporation
Stockholders' Equity Section of the Balance Sheet
At April 30.
Details Amount ($)
Common stock ($400,000 + $10,000 + $15,000) 425,000
Preferred stock 300,000
APIC - Common stock ($2,800,000 + $21,000 + $40,000) 2,861,000
Additional paid in capital - Preferred stock 180,000
Stockholders' equity 3,766,000
a. Prepare journal entries to record the above transactions.
Date Particulars Dr ($) Cr ($)
Apr. 1 Cash (80,000 * $40) 3,200,000
Common stock (80,000 * $5) 400,000
APIC - Common stock 2,800,000
(To record common stock issued in excess of par value.)
Apr. 3 Attorney and promoters service exp. 31,000
Common stock (2,000 * $5) 10,000
APIC - Common stock 21,000
(To record common stock issued to attorneys and promoters for services at a premium.)
Apr. 8 Equipment (Fair value) 55,000
Common stock (3,000 * 5) 15,000
APIC - Common stock 40,000
(To record common stock issued for equipment at a premium.)
Apr. 20 Cash (6,000 * $80) 480,000
Preferred stock (6,000 * $50) 300,000
APIC - Preferred stock 180,000
(To record preferred stock issued in excess of par value.)
b. Prepare the stockholders' equity section of the balance sheet at April 30.
Torey Corporation
Stockholders' Equity Section of the Balance Sheet on April 30
Details Amount ($)
Common stock ($400,000 + $10,000 + $15,000) 425,000
Preferred stock 300,000
APIC - Common stock ($2,800,000 + $21,000 + $40,000) 2,861,000
Additional paid in capital - Preferred stock 180,000
Stockholders' equity 3,766,000
Know more :
https://brainly.com/question/15563732?referrer=searchResults
Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.