Lily Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During 2015,...

Lily Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During 2015, its first year of operation, the company has the following stock transactions. Jan 1 paid the state $5000 for incorporation fees Jan 15 Issued 500,000 shares of stock at $6 per share Jan 30 Attorneys for the company accepted 500 shares of common stock as payment for legal services rendered in helping the company incorporate. The legal services are estimated to have a value of $7000 July 2 Issued 100,000 shares of stock for land. The land had an asking price of $900,000. The stock is currently selling on a national exchange at $8 per share Sept 5 Purchased 15,000 shares of common stock for the treasury at $8 per share Dec 6 Sold 11,000 shares of the treasury stock at $11 per share Indicate the accounts that are increased and/or decreased in the above transactions for Lily Corporation.

Expert Solution

Date	Accounts	Debit	Credit	Decrease in Shareholders' equity (reduction in Net Income)
Jan 1	Organization Expense	$5,000.00		Decrease in Assets(Cash)
	Cash		$5,000.00

Jan 15	Cash (500,000 shares x $6)	$3,000,000.00		Increase in Assets( Cash)
	Common Stock		$1,500,000.00	Increase in Shareholder's Equity
	Paid In capital Excess of Par		$1,500,000.00	Increase in Shareholders' equity

Jan 30	Organization Expense	$7,000.00		Increase in Expenses
	Common Stock (500 shares x $3)		$1,500.00	Increase in Shareholder's Equity
	Paid In capital Excess of Par		$5,500.00	Increase in Shareholders' equity

July 2	Land	$900,000.00		Increase in Assets( Land)
	Common Stock (100000 shares x $3)		$300,000.00	Increase in Shareholder's Equity
	Paid In capital Excess of Par		$600,000.00	Increase in Shareholders' equity

Sep 5	Treasury Stock (15000 shares x $8)	$120,000.00		Decrease in Shareholders' Equity
	Cash		$120,000.00	Decrease in Assets(Cash)

Dec 6	Cash	$121,000.00		Increase in Assets( Cash)
	Treasury Stock (11000 shares x $8)		$88,000.00	Increase in Shareholder's Equity
	Paid In capital from Treasury Stock		$33,000.00	Increase in Shareholder's Equity

ekkarill92 answered 1 year ago

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