Question
Whispering Winds Corporation is authorized to issue 22,500 shares of $50 par value, 10% preferred stock and 130,000 shares of $5 par value common stock.
Whispering Winds Corporation is authorized to issue 22,500 shares of $50 par value, 10% preferred stock and 130,000 shares of $5 par value common stock. On January 1, 2022, the ledger contained the following stockholders equity balances.
| Preferred Stock (10,500 shares) | $525,000 | |
| Paid-in Capital in Excess of ParPreferred Stock | 73,500 | |
| Common Stock (68,500 shares) | 342,500 | |
| Paid-in Capital in Excess of ParCommon Stock | 700,000 | |
| Retained Earnings | 310,000 |
During 2022, the following transactions occurred.
| Feb. | 1 | Issued 2,000 shares of preferred stock for land having a fair value of $125,000. | |
| Mar. | 1 | Issued 1,300 shares of preferred stock for cash at $70 per share. | |
| July | 1 | Issued 16,000 shares of common stock for cash at $7 per share. | |
| Sept. | 1 | Issued 400 shares of preferred stock for a patent. The asking price of the patent was $28,000. Market price for the preferred stock was $70 and the fair value for the patent was indeterminable. | |
| Dec. | 1 | Issued 8,000 shares of common stock for cash at $7.50 per share. | |
| Dec. | 31 | Net income for the year was $260,000. No dividends were declared. |
(a)
Journalize the transactions and the closing entry for net income
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Essentials Of Federal Taxation 2019
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
10th Edition
1260189988, 1260189678, 9781260189674, 978-1259917103, 125991710X, 978-1260190045
