Bill Graham started his career mowing lawns for neighbors while he was in junior high school. Bill worked summers for the local golf course while he was in high school and after he graduated, he started his own lawn care business, Bill's Lawn Care. In addition to lawn care, he also sells two types of fertilizer. Bill is ready to expand his business and wants to add sprinkler systems to his product offering. Larry Miller has an established sprinkler system business and they have agreed to merge their two businesses together. They considered the partnership form of business but have decided to incorporate. You are taking an accounting class at the local community college and have been helping Bill keep the accounting records for his business. He has asked you to stay on and establish and maintain the accounting records for the new company, B&L Landscapes, Inc.
Bill and Larry have hired an attorney and filed the incorporation paperwork with the state of Colorado. In the articles of incorporation, they are authorized to issue 150,000 shares of $1 par value common stock and 5,000 shares of $100 par value, 5%, non-cumulative, non-participating preferred stock. The new corporation will be created on July 1, 2014. The fair value of the assets and liabilities of both companies are as follows:

Bill and Larry have decided that they will each receive 1 share of common stock for every dollar of working capital (assets less liabilities) they contribute to the new company. You may assume that all the assets and liabilities listed above will be part of the new company. Additionally, they issue stock as follows:
Jul 1 Issued 50 shares of preferred stock for $100 per share cash to Bill's father.
Jul 1 Issued 20 shares of preferred stock for $100 per share cash to Larry's mother.
Instructions:
Using the chart of accounts provided below, and the Excel template provided with this assignment, prepare journal entries, in good form, to record the creation of B&L Landscapes, Inc. and the issuance of stock. Use July 1 for the creation journal entries. Start with Page 1 of the General Journal. Explanations are optional.
Prepare a classified balance sheet for B&L Landscapes, Inc. for July 1, 2014.
During the first year of operations, B&L Inc. earned net income of $32,500. They also declared a $2,000 dividend on June 10, 2015 payable on June 30, 2015. Prepare an allocation of the dividend to each class of stock.
Record the journal entries for the dividend declaration and payment on Page 2 of the General Journal. Explanations are optional.
Prepare the Stockholders' Equity section of the balance sheet for June 30, 2015.

OWNER'S EQIUTY
301 Common Stock
310 Preferred Stock
330 Cash Dividends
350 Retained Earnings
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Bills's Lawncare Larry's Sprinkler Systems $11,000 3,000 1,000 5,000 Account Cash $11,500 Accounts Receivable 500 Prepaid Insurance Inventory Land Building Equipment Accounts Payable Notes Payable (due 4/30/2024) 500 1,000 9,000 35,000 7,500 5,000 5,000 0 0 10,000 5,000 0 B&L LANDSCAPES, INC. CHART OF ACCOUNTS ASSETS 101 Cash 110 Accounts Receivable 112 Allowance for Doubtful Accounts 115 Notes Receivable 116 Interest Receivable 120 Supplies 130 Prepaid Insurance 140 Inventory 150 Land 152 Building 153 Equipment 155 Accumulated Depreciation - Building 156 Accumulated Depreciation Equipment 640 Repair and Maintenance Expense REVENUES 401 Lawn Service Revenue 410 Sales Revenue 415 Sales Returms and Allowances 420 Interest Income COST OF GOODS SOLD 501 Purchases 505 Purchase Returns and Allowances EXPENSES 620 Supplies Expense 630 Fuel Expense 650 Advertising Expense LIABILITIES 201 Accounts Payable 220 Notes Payable 225 Interest Payable 280 Dividends Payable 655 Organization Expense 660 Insurance Expense 670 Depreciation Expense 680 Interest Expense 690 Bad Debt Expense B&L LANDSCAPES, INC. CHART OF ACCOUNTS 101 Cash 110 Accounts Recevable 112 Allowance for Doubtful Accounts 115 Notes Receivable 116 Interest Receivable 120 Supples 401 Lown Service Revenue 410 Sales Revenue 415 Sales Returns and Alowances 420 Interest Income COST OF GOODS SOR sol Purchases 505 Purchase Returns and Allowances nsurance 140 Inventory 152 Land 153 Building 155 Accumulated Depreclation-Equipment 156 Accumulated Depreciation-Building EXPENSES 620 Supples Expense 630 Fuel Expense 640 Repair and Maintenance Expense 650 Advertising Expense 655 Organization Expense 660 Insurance Expense 670 Depreciation Expense 880 Interest Expense 690 Bod Debt Expense 201 Accounts Payable 220 Notes Payable 225 Interest Payable 280 Dividends Payable 301 Common Stock 310 Pretemed Stock 330 Cash Dividends 350 Retained