In: Accounting
I JUST WANT TO FIND OUT HOW TO CALCULATE THE 189,540 MONEY AMOUNT OF COMMON STOCK IN PART C?
THANK YOU!
In 2013, Elizabeth and some of her friends invested money to start a company named LADIEZ Corporation. The following transactions occurred during 2013:
Jan 1 | The corporate charter authorized 72,000, $4 cumulative preferred stock and unlimited common stock up to a maximum amount of $21,000,000 to be issued. |
Jan 6 | Issued 178,000 common shares at $18 per share. Shares were issued to Elizabeth and other investors. |
Jan 7 | Issued another 540 common shares to Elizabeth in exchange for her legal services in setting up the corporation. The Stockholders agreed that the legal services were worth $9,180. |
Jan 12 | Issued 4,200 preferred shares for $303,000. |
Jan 14 | Issued 11,000 common shares in exchange for a building acquired. For this purpose shares were valued at $19. |
Nov 15 | The first annual dividend on preferred stock was declared. |
Dec 20 | Paid the dividends declared on preferred stock. |
LADIEZ Corporation generated a $145,000 net income during the
year.
a) Prepare the journal entries to record the above
transactions.
Do not enter dollar signs or commas in the input boxes.
Date | Account Title and Explanation | Debit | Credit |
Jan 6 | AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | |
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | ||
Issued common stock for cash | |||
Jan 7 | AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | |
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | ||
Issued common stock in exchange for services | |||
Jan 12 | AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | |
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | ||
Issue of preferred stock for cash | |||
Jan 14 | AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | |
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | ||
Issued common stock for building | |||
Nov 15 | AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | |
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | ||
Dividend declared on preferred stock | |||
Dec 20 | AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | |
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBuildingCashCommon StockCommon Stock Dividends DistributableCost of Goods SoldDividends Payable - CommonDividends Payable - PreferredIncome SummaryInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLandLegal ExpenseNotes PayablePreferred StockPrepaid RentRent ExpenseRetained EarningsSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUtilities Expense | Answer | ||
Recording payment of dividend |
b) Prepare the statement of retained earnings for the year ended
December 31, 2013.
LADIEZ Corporation | |
Statement of Retained Earnings | |
For the Year Ended December 31, 2013 | |
Opening Balance | Answer |
Add: Net Income | Answer |
Less: Dividends Paid | Answer |
Balance – December 31, 2013 | Answer |
c) Prepare the Stockholders’ equity section of the balance sheet as
at December 31, 2013.
LADIEZ Corporation | |
Stockholders' Equity | |
December 31, 2013 | |
Stock Capital | |
Authorized: 72,000 $4 cumulative preferred stock and unlimited common stock | |
Issued: | |
189,540 Common Stock | Answer |
4,200, $4 Preferred Stock | Answer |
Total Stock Capital | Answer |
Retained Earnings | Answer |
Total Stockholders’ Equity | Answer |
As per your request I have attached the valuation of 189,540 number of common stock.
Please give positive ratings so I can keep answering. If you have any queries please comment. Thanks!
Calculation of Value of Common Stock | ||||||||||||
No. of Shares | Per Unit | Value | ||||||||||
Jan.6 | 178,000.00 | 18.00 | 3,204,000.00 | |||||||||
Jan.7 | 540.00 | - | 9,180.00 | Here per unit price is not given. So the value of service will be taken as value of common stock. | ||||||||
Jan.14 | 11,000.00 | 19.00 | 209,000.00 | |||||||||
Total | 189,540.00 | 3,422,180.00 | ||||||||||
Note: The common stock does not have any par value. Unlimited common stock can be issued but there is a monetary cap. It should be issued within $21,000,000. |