Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor: Preferred 2%

On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor:

Preferred 2% Stock, $50 par (240,000 shares authorized, 86,000 shares issued) $4,300,000
Paid-In Capital in Excess of ParPreferred Stock 516,000
Common Stock, $30 par (1,000,000 shares authorized, 415,000 shares issued) 12,450,000
Paid-In Capital in Excess of ParCommon Stock 1,245,000
Retained Earnings 184,170,000

At the annual stockholders meeting on March 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $11,000,000. The plan provided (a) that a building, valued at $3,360,000, and the land on which it is located, valued at $945,000, be acquired in accordance with preliminary negotiations by the issuance of 123,000 shares of common stock, (b) that 38,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $3,700,000. The plan was approved by the stockholders and accomplished by the following transactions:

May 11 Issued 123,000 shares of common stock in exchange for land and a building, according to the plan.
20 Issued 38,800 shares of preferred stock, receiving $52 per share in cash.
31 Borrowed $3,700,000 from Laurel National, giving a 5% mortgage note.

Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS
Latte Corp.
General Ledger
ASSETS
110 Cash
120 Accounts Receivable
131 Notes Receivable
132 Interest Receivable
141 Inventory
145 Office Supplies
151 Prepaid Insurance
181 Land
191 Building
192 Accumulated Depreciation-Building
LIABILITIES
210 Accounts Payable
221 Notes Payable
226 Interest Payable
231 Cash Dividends Payable
241 Salaries Payable
261 Mortgage Note Payable
EQUITY
236 Stock Dividends Distributable
311 Common Stock
312 Paid-In Capital in Excess of Par-Common Stock
315 Treasury Stock
321 Preferred Stock
322 Paid-In Capital in Excess of Par-Preferred Stock
331 Paid-In Capital from Sale of Treasury Stock
340 Retained Earnings
351 Cash Dividends
352 Stock Dividends
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
515 Credit Card Expense
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Selling Expenses
534 Rent Expense
535 Insurance Expense
536 Office Supplies Expense
537 Organizational Expenses
561 Depreciation Expense-Building
590 Miscellaneous Expense
710 Interest Expense

Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles.

All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 77/112

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

3

4

5

6

7

8

9

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit Risk Alert Employee Benefit Plans Industry Developments 2019

Authors: AICPA

1st Edition

1948306867, 978-1948306867

More Books

Students also viewed these Accounting questions