Question 1 Blue Spruce Corporation is authorized to issue 24,500 shares of $50 par value, 10 preferred stock and 130,000 shares of $5 par value common stock On January 1, 2020, the ledger contained the following stockholders equity balances Preferred Stock (10,000 shares) $500,000 Paid in Capital in Excess of ParPreferred Stock 66,000 Common Stock (61,000 shares) 305,000 Paid in Capital in Excess of ParCommon Stock 650,000 Retained Earnings 320,000 During 2020, the following transactions occurred Feb 1 Issued 2,200 shares of preferred stock for land having a fair value of $121,000 Mar 1 Issued 1,300 shares of preferred stock for cash at $65 per share July 1 Issued 16,000 shares of common stock for cash at $7 per share Sept 1 Issued 350 shares of preferred stock for a patent The asking price of the patent was $30,000 Market price for the preferred stock was $72 and the fair value for the patent was indeterminable Dec 1 Issued 7,750 shares of common stock for cash at $7 50 per share Dec 31 Net income for the year was $255,000 No dividends were declared Journalize the transactions and the closing entry for net income (Record journal entries in the order presented in the problem Credit account titles are automatically indented when amount is entered Do not indent manually ) Enter the beginning balances in the accounts, and post the journal entries to the stockholders equity accounts (Post entries in the order of journal entries presented in the previous part ) Prepare a stockholders equity section at December 31, 2020 (Enter the account name only and do not provide the descriptive information provided in the question )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 17, 2024

Question 1 Blue Spruce Corporation is authorized to issue 24,500 shares of $50 par value, 10% preferred stock and 130,000 shares of $5 par value

Question 1

Blue Spruce Corporation is authorized to issue 24,500 shares of $50 par value, 10% preferred stock and 130,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders equity balances.

Preferred Stock (10,000 shares)		$500,000
Paid-in Capital in Excess of ParPreferred Stock		66,000
Common Stock (61,000 shares)		305,000
Paid-in Capital in Excess of ParCommon Stock		650,000
Retained Earnings		320,000

During 2020, the following transactions occurred.

Feb.	1	Issued 2,200 shares of preferred stock for land having a fair value of $121,000.
Mar.	1	Issued 1,300 shares of preferred stock for cash at $65 per share.
July	1	Issued 16,000 shares of common stock for cash at $7 per share.
Sept.	1	Issued 350 shares of preferred stock for a patent. The asking price of the patent was $30,000. Market price for the preferred stock was $72 and the fair value for the patent was indeterminable.
Dec.	1	Issued 7,750 shares of common stock for cash at $7.50 per share.
Dec.	31	Net income for the year was $255,000. No dividends were declared.

*Journalize the transactions and the closing entry for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

*Enter the beginning balances in the accounts, and post the journal entries to the stockholders equity accounts. (Post entries in the order of journal entries presented in the previous part.)

*Prepare a stockholders equity section at December 31, 2020. (Enter the account name only and do not provide the descriptive information provided in the question.)