Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Identify the specific effects (including account name, dollar amount, and financial statement impact) on the various balance sheet components. Use (I) to indicate an increase,
Identify the specific effects (including account name, dollar amount, and financial statement impact) on the various balance sheet components. Use (I) to indicate an increase, (D) to indicate a decrease and NE to indicate the transaction has no effect on a particular balance sheet component.
Equity Assets Liabilities Contributed Retained Transaction CapitalEarnings As part of Makepeace Properties incorporation agreement, a consultant was retained at an agreed-upon fee of $80,000 to provide a marketing plan for the first year of business. The plan benefited the first year only. The consultant felt that Makepeace had an excellent opportunity for success. So the consultant waived the normal $80,000 consulting fee in exchange for 1,000 shares of Makepeace's $1 par value common stock. Honest Vegetable Co. acquired a tract of undeveloped land in exchange for 9,000 shares of $1 par value common stock. The land's market value was not easily determinable, but the common stock sold on the New York Stock Exchange for $21 per share on the date of the transactionStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started