The following transactions occurred at Pharaoh Inc. during its first year of operation: a. Issued 100,000...

The following transactions occurred at Pharaoh Inc. during its first year of operation:

a. Issued 100,000 common shares at $5 each; 1,000,000 no par shares are authorized.

b. Issued 10,000 common shares for a building and land. The building was appraised for $20,000, but the value of the land is undeterminable. The shares are selling for $10 on the open market.

c. Purchased 1,000 of its own common shares on the open market for $16 per share.

d. Declared a dividend of $0.10 per share on outstanding common stock. The dividend is to be paid after the end of the first year of operations. Market value of the shares is $26.

e. Reported $180,000 of income for the year.

Required

1. Prepare the journal entries required to record the transactions on the books of Pharaoh Inc.

2. Indicate each transaction’s effect on the assets, liabilities, and owners’ equity of Pharaoh Inc.

3. Prepare the Shareholders’ Equity section of the Statement of Financial Position.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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