Assume that a start-up manufacturing company raises capital through a series of equity issues. a. Using the

Question:

Assume that a start-up manufacturing company raises capital through a series of equity issues.

a. Using the financial statement template below, summarize the financial statement effects of the following transactions. Identify the account affected and use plus and minus signs to indicate the increases and decreases in the specific element of the balance sheet (assets, liabilities, components of shareholders’ equity).

(1) Issues 100,000 shares of $1 par value common stock for $10 per share.

(2) Receives land in exchange for 10,000 shares of $1 par common stock when the common stock is trading in the market at $15 per share. The land has no readily determinable market value.

(3) Receives subscriptions for the issue of 40,000 shares of $1 par value common. The share issue price is $20, of which 30 percent is received as a down payment. Subsequently, the remaining 70 percent is received.

Shareholders' Equ Ity Llablitles Assets AOCI RE Cc Journal entry:

b. In each case, how does the company measure the transaction? What measurement attribute is used?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...