Question
Mountain Sports is looking to raise additional funding for their business to expand. They will be able to acquire cash in addition to a new
Mountain Sports is looking to raise additional funding for their business to expand. They will be able to acquire cash in addition to a new vehicle for their employees to use for travel to guided tours. Before the following transactions, their balance of common stock on April 1st, 2021 was $100,000 and included 100,000 shares of common stock issued and outstanding. There was no Paid-In Capital In Excess of Par-Common) and no preferred stock issued at this point. Cody Mountain Sports had the following transactions in April 2021:
Apr. 1 | Issued 45,000 shares of $1 par value common stock for a total of $90,000. |
Apr. 9 | Issued 10,000 shares of 8%, $2 par value preferred stock in exchange for the truck with market value of $30,000. |
Apr. 15 | Declared total cash dividends of $5,000. |
Apr. 19 | Declared a 4% common stock dividend when the market value of the stock was $5.00 a share. |
Apr. 30 | Paid the cash dividends. |
Apr. 30 | Distributed the stock dividend. |
Requirements:
- Journalize all transactions.
- Calculate the balance in Retained Earnings as of April 30th, 2021. Assume the balance on April 1st, 2021 was $3,400 and net income was $5,900.
- Prepare the stockholders equity section of the balance sheet as of April 30th, 2021.
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