Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, a corporation had 30,000 of common shares outstanding originally issued at $610,600. The corporation is authorized to issue an unlimited number of

On January 1, a corporation had 30,000 of common shares outstanding originally issued at $610,600. The corporation is authorized to issue an unlimited number of common shares. The balance of retained earnings on that date was $980,800. The following transactions occurred during the current year. Calculate average cost to the nearest $0.01:

Jan. 16 Sold 6,000 common shares to investors at $9.00 per share in cash.

Mar. 20 Buyback (repurchase) 2,000 of its own common shares from investors at $23.00 per share with cash.

Sept. 6 Board of Directors declared a 10% stock dividend to common shareholders owing shares as of Sept 15. The market price per common share was $15.00 on September 6 and the stock dividend was distributed to shareholders on October 3.

Nov. 7 Board of Directors declared a $0.30 per share cash dividend to common shareholders. The date of record was November 15 and the payment date was November 29.

Dec. 31 The Corporation reported a net loss for the year of $70,000.

Instructions

a) Prepare the journal entries related to the above transactions. Calculate to the nearest dollar.

b) Prepare the shareholders equity section of the balance sheet on December 31.

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

Step: 3

blur-text-image

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

Managing IoT Systems For Institutions And Cities Internal Audit And IT Audit

Authors: Chuck Benson

1st Edition

1138590487, 978-1138590489

More Books

Students also viewed these Accounting questions

Question

Discuss how CRM creates value for the firms stakeholders .

Answered: 1 week ago