CHAPTER 11 PRACTICE CASE Paid-in capital (LG 1-3, 5, 6) As the manager of the interior desionm has also had a very successful career as a large fumiture store, Jennifer Sweeney to open To attract sufficie her own home interior design store in Norman, Oklahoma. To as a corporation named Tranquility Designs Company. The follouit l ste n the new conypanonstock of the company took place during August 2011, thit onhofm involving the common 2011 Received a charter authorizing the issuance of 500,000 shares of $1 par value common stoo Aug. ed for cash 150,000 shares of common stock at S2.60 per share. The shares w Jennifer (100,000 shares) and her husband Chad (50,000 shares). Issued for cash 30,000 shares of common stock at $4 per share to Noah O'Nil 21 Exchanged 10,000 shares of common stock for equipment having a fair market vaue of S48.0 29 Noah O' Neill sold 1,500 of his shares of common stock to a business associate narmed Robet Fio 20 for $5.80 per share. REQUIRED I. Journalize the transactions in general journal form 2. Prepare a classified balance sheet for Tranquility Designs Company as of August 31, al 3. Describe some of the advantages that Jennifer will gain by using the corporate fim d organization and some of the disadvantages she will experience. 4. What other sources of equity will Jennifer have in the future that have not been wod sla BUSINESS DECISION AND COMMUNICATION PROBLEM The decision to incorporate (LG 1, 2) Rob Snyder owns three very successfal odie ar Kansas City. He wants to expand to Denver but needs additional money t believes ness operates as a sole proprietorship. Rob btat e of probabl incorporate, although he is not sure he knows what the major a are. If he does incorporate, Rob is uncertain about what type or use. Rob does not understand the difference between preferred an about how stock with a par value differs from no-par stock s of shares of stock common stock He is Rob has called you, his longtime accountant, asking for intor information Rue eou pronise to pregare a memo providing the information or information on the issues prepare a memo Rob wants. REQUIRED Draft a memo for Rob covering the nointtl