1. The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020 and that Altos Companys charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative preferred stock.

• Issued 5000 shares of common stock. Stock has par value of 0.01 per share and was issued at $30 per share.
• Issued 2000 shares of preferred stock at par value as payment in exchange for legal services.
• Exchanged 100000 shares of common stock for land with an appraised value of $250000 and a building with an appraised value of $450000
• Earned Net income $500000
• Paid dividends to preferred shareholders as well as $2 per share to common stockholders.

Using the info above and as a guide:

1. Prepare the journal entries with narrations to record the following:

• The issuances of stock.
• Close out net income to retained earnings.
• Dividend paid.
• Close out dividend to retained earnings.

2. Prepare Altos Companys Stockholders equity section of the balance sheet at December 31, 2020. (Hint!!!!!!!) The following information must be clearly stated/shown:
   • information on par values,
   • the number of shares authorized and issued where necessary.
   • the sub total for the total paid in capital.
   • Retained earnings.
   • total stockholders equity.