A sole proprietorship was started on January $1,$ Year $1,$ when it received $$55,000$ cash from Marlin Jones, the owner. During Year $1,$ the company earned $$38,700$ in cash revenues and paid $$18,730$ in cash expenses. Jones withdrew $$4,200$ cash from the business during Year $1.$

Required

Prepare an income statement, capital statement $($statement of changes in equity$),$ balance sheet, and statement of cash flows for Jones$$ Year $1$ fiscal year.

Faith Busby and Jeremy Beatty started the B&B partnership on January $1,$ Year $1.$ The business acquired $$88,000$ cash from Busby and $$132,000$ from Beatty. During Year $1,$ the partnership earned $$67,800$ in cash revenues and paid $$41,800$ for cash expenses. Busby withdrew $$1,600$ cash from the business, and Beatty withdrew $$4,100$ cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business.

Required

Prepare an income statement, capital statement, balance sheet, and statement of cash flows for B&B$$s Year $1$ fiscal year.

Enscoe Enterprises, Incorporated $($EEI$)$ has $240,000$ shares authorized, $210,000$ shares issued, and $20,000$ shares of treasury stock. At this point, EEI has $$1,530,000$ of assets. $$200,000$ liabilities, $$460,000$ of common stock, and $$870,000$ of retained earnings. Further, assume that the market value of EEI's common stock is $$9$ per share.

Required

a$.$ Determine the number of shares of stock that is outstanding.

b$.$ Determine the book value per share.

c$.$ Provide a rational explanation for the difference between the book value per share and the market value per share of EEI's common stock.

Newly formed S&J Iron Corporation has $90,000$ shares of $$6$ par common stock authorized. On March $1,$ Year $1,$ S&J Iron issued $8,500$ shares of the stock for $$11$ per share. On May $2,$ the company issued an additional $20,000$ shares for $$20$ per share. S&J Iron was not affected by other events during Year $1.$

Required

Record the transactions in a horizontal statements model.

Determine the amount S&J Iron would report for common stock on the December $31,$ Year $1,$ balance sheet.

Determine the amount S&J Iron would report for paid$-$in capital in excess of par.

What is the total amount of capital contributed by the owners?

What amount of total assets would S&J Iron report on the December $31,$ Year $1,$ balance sheet?

Prepare journal entries to record the March $1$ and May $2$ transactions.

$5.$ Mercury Corporation issued $4,000$ shares of no$-$par common stock for $$25$ per share. Mercury also issued $2,400$ shares of $$60$ par, $6$ percent noncumulative preferred stock at $$70$ per share.

Required

Record these events in a horizontal statements model.

Prepare journal entries to record these transactions.

$8.$ The following information pertains to JAE Corporation at January $1,$ Year $1.$

Common stock, $$9$ par, $10,000$ shares authorized,

$2,000$ shares issued and outstanding

$ $18,000$

Paid$-$in capital in excess of par, common stock

$12,100$

Retained earnings

$62,200$

JAE Corporation completed the following transactions during Year $1$:

Issued $900$ shares of $$9$ par common stock for $$25$ per share.

Repurchased $150$ shares of its own common stock for $$22$ per share.

Resold $50$ shares of treasury stock for $$23$ per share.

Required

a$.$ How many shares of common stock were outstanding at the end of the period?

b$.$ How many shares of common stock had been issued at the end of the period?

c$1.$ Prepare journal entries for these transactions.

c$2.$ Post the journal entries to T$-$accounts.

d$.$ Prepare the stockholders$$ equity section of the balance sheet reflecting these transactions.

$9.$ On May $1,$ Year $1,$ Love Corporation declared a $$42,700$ cash dividend to be paid on May $31$ to shareholders of record on May $15.$

Required

Record the events occurring on May $1,$ May $15,$ and May $31$ in a horizontal statements model.

Prepare journal entries for all events associated with the dividend.