Question

E13-24 (similar to) The charter of Magnolia Corporation authorizes the issuance of 1 000 shares of preferred stock and 1000 shares of common stock. During a​ two-month period, Magnolia completed these​ stock-issuance transactions:

23

Issued 250

shares of

​$4

par value common stock for cash of

$ 13

per share.

Apr.

12

Received inventory with a market value of $ 26000

and equipment with a market value of

$ 14000

for

310

shares of the

​$4

par value common stock.
	17		Issued 1 comma 000

shares of

7 %

​,

​$50

par value preferred stock for

​$50

per share

Requirement 2. Prepare the​ stockholders' equity section of the

Magnolia

balance sheet as of

April

30

​,

2018

​,

for the transactions given in this exercise. Retained Earnings has a balance of

$ 77000

at

April

30

​,

2018

.

Magnolia Corporation

Balance Sheet (Partial)

April 30, 2018

Stockholders' Equity

Answer 1

Journal entry:

Date	Account title	Debit	Credit
Mar-23	Cash (250 x$13)	3,250
	Common stock (250 x$4)		1,000
	Paid in capital in excess of par-Common stock		2,250
Apr. 12	Inventory	26,000
	Building	14,000
	Common stock (310 x$4)		1,240
	Paid in capital in excess of par-Common stock		38,760
Apr. 17	Cash (1,000 x$50)	50,000
	Preferred stock		50,000

Stockholders' equity section of the balance sheet:

Magnolia Corporation
Balance sheet (Partial)
April 30, 2019
Stockholders' equity
Paid in capital:
Capital stock:
Preferred stock	50,000
Common stock ($1,000+$1,240)	2,240
Total capital stock	52,240
Additional paid in capital:
Paid in capital in excess of par-Common stock (2,250+38,760)	41,010
Total paid in capital	93,250
Retained earnings	77,000
Total stockholders' equity	170,250