Question
Tony Corporation began operations on January 1, 2018. The following transactions relating to stockholders equity occurred in the first two years of the companys operations.
Tony Corporation began operations on January 1, 2018. The following transactions relating to stockholders equity occurred in the first two years of the companys operations.
2018
Jan. 1 Authorized the issuance of 2 million shares of $5 par value common stock and 100,000 shares of $100 par value, 10% cumulative, preferred stock.
Jan. 2 Issued 200,000 shares of common stock for $12 cash per share.
Jan. 3 Issued 100,000 shares of common stock in exchange for a building valued at $820,000 and merchandise inventory valued at $380,000.
Jan. 4 Paid $10,000 cash to the companys founders for organization activities.
Jan. 5 Issued 12,000 shares of preferred stock for $110 cash per share.
2019
June 4 Issued 100,000 shares of common stock for $15 cash per share.
Required:
- Prepare journal entries to record these transactions.
- Prepare calculation showing dividend allocations and dividends per share for 2018 and 2019 assuming Tony declares the following cash dividends: 2018, $50,000, and 2019, $300,000.
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