Cell Wireless needed additional capital to expand, so the business incorporated. The charter from the state of

Question:

Cell Wireless needed additional capital to expand, so the business incorporated. The charter from the state of Georgia authorizes Cell to issue 40,000 shares of 10%, $ 50 par value cumulative preferred stock, and 100,000 shares of $ 1 par value common stock. During the first month, Cell completed the following transactions:

Oct. 2 Issued 21,000 shares of common stock for a building with a market value of $ 240,000.

6 Issued 600 shares of preferred stock for $ 80 per share.

9 Issued 11,000 shares of common stock for cash of $ 20,000.

10 Declared a $ 12,000 cash dividend for stockholders of record on

Oct. 20. Use a separate Dividends Payable account for preferred and common stock.

25 Paid the cash dividend.

Requirements

1. Record the transactions in the general journal.

2. Prepare the stockholders’ equity section of Cell’s balance sheet at October 31, 2014. Assume Cell’s net income for the month was $ 82,000.

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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... 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,...