ACCT1002 Introduction to Financial Accounting Ben and Eric are opening a comic bookstore to be registered as E&B Comic Bookstore Co. There is no other competing comic bookstore in the area. Their fundamental decision is how to organize the business and they anticipate a substantial profit in the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow. They feel the corporate form of operation will be best for the long term. They seek your advice. Requirements 1. What is the main advantage they gain by selecting a corporate form of business now? 2. Distinguish between par value and issue price. 3. If they decide to issue S1 par common stock and anticipate an initial market price of $80 per share, how many shares will they need to issue to raise $4,000,000? 4. The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic Bookstore Company's charter will authorize 1.200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, SX par value (see info below) 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company's journal entries and statement of owner's equity based on the following information which is grouped according to your first name initial. (Hint!!! Example first Manuel will use the initial and that person should only use the info presented in line with the heading with their first name initial. You are not allowed to use info associated other initials other than that of your own as this will result in the forfeiture of the grade.) 2 ACCT ection to Faceturting A. Issued__shares of class A common stock. Stock has par value of_pet share and was issued at $_ per share. (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space) firstname Initial of shares issued Par value APLEV 30% of authorised shares S 2000 CORY 20% of authorised shares 30.00 K, Q. MF 40% of authorised shares 45.00 S.W.A,Z 50% of authorised Shares 45.00 D.T.LU 60% of authorised shares 48.00 N.B.J.XH B0% of authorised shares 6000 Issue Price $2800 540.00 $6200 5.15.00 510500 $125.00 B. Issued shares of no per class B stock please refer to table below and use only the info in line with your first name initial in the blank/underlined space) firstname Initial of shares issued issue Price A.P.LEV 50% of authorised Shares 25.00 CORY 20% of authorised shares 3800 KOMF 40% of authorised shares 6000 SW.02 50% of authorised Shares 70700 DULU 60% of authorised shares 98 00 NBJXH 80% of authorised Shares 118.00 ACET in terting shares of preferred stock at par vale. Please refer to table below and use only the info in line C. Issued with your first name initial in the blanklunderlined space) firstname Initial of shares issued Par Value AP.1, E.V 50% of authorised shares S 100.00 CORY 40% of authorised shares 110.00 KOMF 30% of authorised shares S 125.00 SW.0.2 25% of authorised shares S 145.00 BLL U 20% of authorised shares 168.00 N, B.J.XH 10% of authorised shares S 192.00 D. Exchanged shares of class A common stock for Office Furniture and Equipment with an appraised value of $ __and Motor Truck with an appraised value of $ _Please refer to table below and use only the info in line with your first name initial in the blank/underlined space) firstname Initial of shares issued Office Furniture Motor truck A PALEV 40% of authorised shares $4000,000.00 $ 10.000.000,00 CORY 50of authorised shares 54000.000,00) 510 000 000.00 KOME 40% of authorised shares $4000,000.00 510 000 000 00 SW.6.2 40% of authorised shares $ 4.000.000.00 $ 10.000.000,00 DTLU 40% of authorised shares 54.000.000.00 $ 10.000.000.00 NBJXH 20% of authorised shares 54.000.000.00 $ 10.000.000.00 E. Earned Net income $ (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space) firstname Initial Net Income A, P.L.E. V $ CORY $ KQ, M, F $ S.W.GZ $ DTLU $ N.B. J.XH $ 1.500,000.00 1.800,000.00 2.000.000,00 1.400,000.00 1.450,000.00 1.500.000.00 F. Declared interim dividends for preferred shareholders as well as 5.80 per share to common stockholders. Using the info above and as a guide: A. Prepare the journal entries with narrations to record the following: The issuances of stock Close out net income to retained earnings Dividend declared. Close out dividend to retained earnings. B. Prepare the company's Stockholders equity section of the balance sheet at December 31, 2020. (Hint!!!) The following information must be clearly stated/shown: information on par or par values for all classes of shares which must be shown separately 5 ACCT2002 Introduction to Financial Accounting the number of shares authorized and issued where necessary the sub total for the total paid in capital Retained earnings total stockholders' equity