Question

Cole Corporation, a new corporation, took over the assets and liabilities of Delta Art on January 2, 2019. The assets and liabilities, after appropriate revaluation by Cole, are as follows (amounts in parentheses are credits, other amounts are debits: points Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Accounts Payable Accrued Expenses Payable $ 49,900 296,200 (12,000) 125,000 (36,900) (20, 200) Skipped The corporation is authorized to issue 500,000 shares of $20 par value common stock and 400,000 shares of $10 par-value preferred stock. The preferred stock bears a stated yearly dividend rate of $1 per share. The transactions that follow were entered into at the time the corporation was formed. References DATE TRANSACTIONS Jan.2 The corporation Issued 20,000 shares of common stock to James Cole for his equity in the sole proprietorship business, and the corporation took over Cole's assets and liabilities. 2 Issued 1,600 shares of preferred stock at par to Harriet Cole, James's wife, for cash. 2 Issued 7400 shares of common stock to Carol Kennedy. She paid $148,000 in cash for the stock. 2 Issued 5,600 shares of preferred stock to James Walker. He paid $56.000 in cash for the stock Required: 1. Make general Journal entries to record the transactions 2. Prepare the opening balance sheet as of January 2, 2019, for Cole Corporation.

Answer 1

Here in this case Delta is being purchased by corporation by giving equity benefits to the sole propriertor of the transferor company.

Bate I Cole Cesprali Alaualle 36,900 Cereal reasclis 20, 200 I Cash Afc Alohlec. I doubt fuldeft Islode 49,900 296, 200 (2000) 1,23,000 T 51,100 457100 - Squily - - 2 Aseet - kiasily 4,571,00 - 571oo $4,00,000 In the bools of cosporalia Jank Merchandic Assets alcor 123000 diventry Mo Rec aloer. 204200 O Cash ale at 49900 - - To TO To Me payable ale 20,200 Acornel exppayasoape 36,900 Shane Capital afc. 4ooooo (20000 x $205 - ( Being Common dinned to stock of 20000 James Cole @ parie $20)

Jan Cash afcar $16000 to refrence have Prefrence radale $16000 e (1600 x $10) 1 Велир младеелле Хламе или to jaimes wife @ pan ie $16) - - Jan 2 AAAAA - I Cash ale as $148,000 Jo Canyon Sloderat de $198806 to share la $20x1400) ( Being equily have crned to Carol kennedy @ par $20) Cash ale as $56000 To Prefrence shame $56000 - Carital de (5600 x $10 (Being prefenue shone Comed James wallen @ Jen2 ane T ren! ~ Receniedom Kinooo OWN cash @ hand as on 2 Conhoop. comp.) 349900 w a Jameshife 2 u Recundum Canl = $148000 kemedy - Readindhor = $ 56000 - Jameswallen $ 269900 1 TL

CA Date - Page Equity trasility Authented have capital Equity 100,00,000 chodbex$0) 40,00, 900. opening Bls as on 02 Jan 2019 | Amont ($) Arneut Amour Cast ICW/N-1) 26,9900 Prereme: Current Damet Recenaue 284200 Ismed shone Capital gutely: $5, 48000 Preference suore! 5,48000 Merchandire ] Laventory 123000 72000 JULI Slant tem Learlig Ales payable 36,900 other Liabilities se acomed 120,00 exopeus. Total 677100 6771oo