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The charter of Evergreen Corporation authorizes the issuance of 900 shares of preferred stock and 1,400...

The charter of Evergreen Corporation authorizes the issuance of 900 shares of preferred stock and 1,400 shares of common stock. During a​ two-month period, Evergreen completed these​ stock-issuance transactions:

Mar.Mar.

23

 Issued 230 shares of $3 par value common stock for cash of $15 per share.

Apr.Apr.

12

 Received inventory with a market value of $27,000 and equipment with a market value of $19,000 for 320 shares of the $3 par value common stock.

17

Issued 900 shares of 5%​, $20 par value preferred stock for $20 per share.

PART A. RECORD THE FOLLOWING TRANSACTIONS.

1) Issued 230 shares of ​$3 par value common stock for cash of $15 per share.

2)

Received inventory with a market value of $27,000 and equipment with a market value of $19,000 for 320 shares of the $3 par value common stock.

PART B. Prepare the​ stockholders' equity section of the Evergreen balance sheet as of April 30​, 2018​, for the transactions given in this exercise. Retained Earnings has a balance of $73,000 at April 30​, 2018.

Solutions

Expert Solution

PART A. RECORD THE FOLLOWING TRANSACTIONS.

1) Issued 230 shares of ​$3 par value common stock for cash of $15 per share.

Date Accounts and Explanations Debit Credit
Mar 23 Cash (230 shares x $15 per share) $3,450
Common stock (230 shares x $3 per share) $690
Paid-in capital (excess of cash over common stock) $2,760

2) Received inventory with a market value of $27,000 and equipment with a market value of $19,000 for 320 shares of the $3 par value common stock.

Date Accounts and Explanations Debit Credit
Apr 12 Inventory $27,000
Equipment   $9,000
Common stock (320 shares x $3 per share)     $960
Paid-in capital (excess of inventory&equipment over common stock) $34,040

3)Issued 900 shares of 5%​, $20 par value preferred stock for $20 per share.

Date Accounts and Explanations Debit Credit
Apr 17 Cash (900 shares x $20) $18,000
Preferred stock $18,000

PART B. Prepare the​ stockholders' equity section of the Evergreen balance sheet as of April 30​, 2018​, for the transactions given in this exercise. Retained Earnings has a balance of $73,000 at April 30​, 2018.

Evergreen Corporation

Stockholders Equity as on April 30, 2018

Paid-in capital:

              Preferred stock: 900 shares authorised, issued and outstanding, Par value $5                       $18,000

              Common stock: 1400 shares authorised, 550 shares issued and outstanding, Par value $3       $1,650

              Paid-in capital in excess of par-common stock (2760+34040 as per journal entries)                 $ 36,800

Total Paid-in capital                                                                                                                                    $56,450

Reserves                                                                                                                                                    $73,000

Total stockholder's equity                                                                                                                        $129,450

ekkarill92 answered 1 year ago
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