Question
Stock Issuance Bonano Industries had the following transactions during 2017, its first year of business. Required: 1. Identify and analyze the effect of each transaction.
Stock Issuance
Bonano Industries had the following transactions during 2017, its first year of business.
Required:
1. Identify and analyze the effect of each transaction.
a. Issued 4,300 shares of $5 par common stock for cash at $15 per share.
-Activity:
-Accounts:
-Statement(s):
How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.
b. Issued 7,000 shares of common stock on May 1 to acquire a factory building from Barkley Company. Barkley had acquired the building in 2013 at a price of $150,000. Bonano estimated that the building was worth $175,000 on May 1, 2017.
- Activity:
- Accounts:
- Statement(s):
How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.
c. Issued 2,100 shares of stock on June 1 to acquire a patent. The accountant has been unable to estimate the value of the patent but has determined that Bonano's common stock was selling at $25 per share on June 1.
- Activity:
- Accounts:
- Statement(s):
How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.
2. Determine the balance sheet amounts for common stock and additional paid-in capital.
- Common Stock: $
- Additional Paid-in Capital: $
- Total Contributed Capital: $
Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses IncomeStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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