Question

Wireless needed additional capital to​ expand, so the business incorporated. The charter from the state of Georgia authorizes

Upper B minus WirelessB−Wireless

to issue

100 comma 000100,000

shares of

7 %7%​,

​$5050

par value cumulative preferred stock and

100 comma 000100,000

shares of

​$11

par value common stock. During the first​ month,

Upper B minus WirelessB−Wireless

completed the following​ transactions:

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​(Click the icon to view the​ transactions.)Read the requirements

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.

Requirement 1. Record the transactions in the general journal. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)

Oct.Oct.

​2: Issued

25 comma 00025,000

shares of common stock for a building with a market value of

$ 100 comma 000$100,000.

Date			Accounts and Explanation	Debit	Credit
Oct. 2			Building	100,000
			Common Stock—$1 Par Value		25,000
			Paid-In Capital in Excess of Par—Common		75,000
			Issued common stock for building.

Oct.Oct.

​6: Issued

850850

shares of preferred stock for

$ 130$130

per share.

Date			Accounts and Explanation	Debit	Credit
Oct. 6			Cash	110,500
			Preferred Stock—$50 Par Value		42,500
			Paid-In Capital in Excess of Par—Preferred		68,000
			Issued preferred stock for cash.

Oct.Oct.

​9: Issued

16 comma 00016,000

shares of common stock for cash of

$ 64 comma 000$64,000.

Date			Accounts and Explanation	Debit	Credit
Oct. 9			Cash	64,000
			Common Stock—$1 Par Value		16,000
			Paid-In Capital in Excess of Par—Common		48,000
			Issued common stock for cash.

Oct.Oct.

​10: Declared a

$ 17 comma 000$17,000

cash dividend for stockholders of record on

Oct.Oct.

20. Use a separate Dividends Payable account for preferred and common stock.

Date			Accounts and Explanation	Debit	Credit
Oct. 10			Cash Dividends	17,000
			Dividends Payable—Common		14,025
			Dividends Payable—Preferred		2,975
			Declared cash dividend.

Oct.Oct.

​25: Paid the cash dividend.

Date			Accounts and Explanation	Debit	Credit
Oct. 25			Dividends Payable—Common	14,025
			Dividends Payable—Preferred	2,975
			Cash		17,000
			Paid cash dividend.

Requirement 2. Prepare the​ stockholders' equity section of

Upper B minus WirelessB−Wireless​'s

balance sheet at

OctoberOctober

3131​,

20182018.

Assume

Upper B minus WirelessB−Wireless​'s

net income for the month was

$ 88 comma 000$88,000.

​(Assume all temporary accounts have been closed prior to preparing the​ stockholders' equity section of the balance​ sheet.)

B-Wireless Wireless

Balance Sheet (Partial)

October 31, 2018

Stockholders' Equity
	Paid-In Capital:
	Total Paid-In Capital
	Total Stockholders' Equity

Answer 1