The Stockholders equity accounts of Jajoo Corporation on January 1, 2005 were as follows:
Preferred Stock (10%, $100 par no cumulative, 5,000 shares authorized) $ 300,000
Common Stock ($5 stated value, 300,000 shares authorized) 1,000.000
Paid-in Capital in Excess of Par Value- Preferred Stock 20,000
Paid-in Capital in Excess of Stated Value- Common Stock 425,000
Retained Earnings 488,000
Treasury Stock- Common (5,000 shares) 40,000
During 2005 the corporation had the following transactions and events pertaining to its stockholders equity.
Feb 1. - Issued 3,000 shares of common stock for $25,000
Mar. 20- Purchased 1,500 additional shares of common treasury stock at $8 per share
June 14 - Sold 4,000 shares of treasury stock - common for $36,000
Sept 3 Issued 2,000 shares of common stock for a patent value at $17,000
Dec 31 determined the net income for the year was $340,000
(a) Journalize the transactions and the closing entry for net income
(b) Enter the beginning balances in the accounts and port the journal entries to the stock holders' equity accounts (Use J1 as the posting reference)
(c) Prepare the stockholders equity section at December 31,2005.
Knight Corporation is authorized to issue 10,000 of $50 par value, 10% preferred stock and 200,000 shares of $5 par value common stock. On January 1, 2005 the ledger contained the following stockholders equity balances:
Preferred Stock (4,000 shares) $200,000
Paid-in Capital in Excess of Par Value -Preferred 60,000
Common Stock (70,000 shares) 350,000
Paid-in Capital in Excess of Par Value - Common 700,000
Retained Earning 300,000
During 2005 the following transaction occurred:
Feb 1 - issued 1,000 shares of preferred stock for land having fair market value of $65,000
Mar 1- Issued 1,000 shares of preferred stock for cash at $60 per share.
July 1 - Issued 20,000 shares of common stock for cash at $5.80 per share
Sept 1 - Issued 800 shares of preferred stock for a patent. The asking price of the patent was $60,000; Market values were preferred stock $65 and patent, indeterminable.
Dec 1- Issued 10,000 shares of common stock for cash at $6 per share
Dec 31 - Net income for the year was $210,000, No dividends were delared.
(a) Journalize the transactions and the closing entry for the net income
(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders equity accounts ( Use J2 as the posting reference)
(c) Prepare the stockholders equity section at December 31, 2005
The following stockholders equity accounts arranged alphabetically are in the ledger of McGarth Corporation at December 31, 2005:
Common Stock ($10 stated value) $1,500,000
Paid-in Capital from Treasury Stock 6,000
Paid-in Capital in Excess of Stated Value- Common Stock 690,000
Paid-in Capital in Excess of Par Value - Preferred Stock 288, 400
Preferred Stock (8%, $100 par, noncumulative) 400,000
Retained Earnings 776,000
Treasury Stock- Common ( 8,000 shares) 88,000
Prepare stockholders equity section at December 31,2005© BrainMass Inc. brainmass.com March 4, 2021, 7:37 pm ad1c9bdddf
The solution explains the various transactions relating to equity accounts and the preparation of the stockholders equity section.