44 CHAPTER 11 PRACTICE CASE the interior design department of et. Jennifer now wishes Paid-in eupital (LG 1-3, 5, 6) As the manager o large furniture to open her own home interior design store in Norman, Oklahoma. To attract sufficient capital, shef the new company as a corporation named Tranquility Designs Company. The following transactina involing the common stock of the company took place during Angust 2011, the first month of openations iture store, Jennifer Sweeney has also had a very successful career as a p 2011 Received a charter authorizing the issuance of 500,000 shares of $1 par value common stock Aug. Issued for cash 150,000 shares of common stock at $2.60 per share. The shares were purchsed Jennfer (100,000 shares) and her husband Chad (50,000 shares). 20 Issued for cash 30,000 shares of common stock at $4 per share to Noah O'Neil. 21Exchanged 10,000 shares of common stock for equipment having a fair market value of $48,000 29 Noah 'Nil sold 1,500 of his shares of common stock to a business associate named Robert Fro for $5.80 per share. REQUIRED 1. Journalize the transactions in general journal form 2. Prepare a classified balance sheet for Tranquility Designs Company as of August 31, 2011. 3. Describe some of the advantages that Jennifer will gain by using the corporate form of organization and some of the disadvantages she will experience 4. What other sources of equity will lennifer have in the future that have not been used so far? BUSINEsS DECISION AND COMMUNICATION PROBLEM The decision to incorporate (LG 1, 2) Rob Snyder owns three very successful coffee shops in Kansas City. He wants to expand to Denver but needs additional money to finance the expansion. Currently, Rob's business operates as a sole proprietorship. Rob believes that he should probably incorporate, although he is not sure he knows what the major advantages of incorporabion