Question

Stockholders' Equity: Transactions and Balance Sheet Presentation Tunic Corporation was organized on April 1, with an authorization of 25,000 shares of six percent, $50 par value preferred stock and 200,000 shares of $5 par value common stock. During April, the following transactions affecting stockholders' equity occurred: Apr. 1 Issued 83.000 shares of common stock at $15 cash per share. 3 Issued 5,000 shares of common stock to attorneys and promoters in exchange for their services in organizing the corporation. The services were valued at $34,000. 8 Issued 4,000 shares of common stock in exchange for equipment with a fair market value of $51,000. 20 Issued 9.000 shares of preferred stock for cash at $55 per share. Required a. Prepare journal entries to record the above transactions. Debit 1,245,000 $ $ Credit 0 415,000 830,000 0 34,000 0 0 0 25,000 9.000 General Journal Date Description Apr.01 Cash Common Stock Paid-in-Capital in Excess of Par Value - Common Stock Issued shares of common stock. Apr.03 Organization Costs Common Stock Paid-in-Capital in Excess of Par Value - Issued common stock for organization costs. Apr.08 Equipment Common Stock Paid-in-Capital in Excess of Par Value Issued common stock for equipment. Apr.20 Cash Preferred Stock Paid-in-Capital in Excess of Par Value - Issued shares of preferred stock. 51.000 0 20.000 31,000 0 495,000 0 0 0 450.000 45.000 b. Prepare the stockholders' equity section of the balance sheet at April 30. Assume that the net income for April is $49,000. Stockholders' Equity Paid in Capital Common Stock $ 460,000 x Preferred Stock Ox $ 450,000 X Additional Paid-in-Capital Paid-in-Capital in Excess of Par value - Preferred Stock OX Paid-in-Capital in Excess of Par value - Common Stock 0 x 870,000 x Common Stock 45,000 x Preferred Stock 915,000 x Total Paid-in-Capital $ 1,825,000 x

Answer 1

Stockholders' equity section

Paid in capital
Common stock	460,000
Additional paid in capital - Common stock	870,000
Common stockholders' paid in capital		1,330,000
Preferred stock	450,000
Additional paid in capital - Preferred stock	45,000
Preferred stockholders' paid in capital		495,000
Total paid in capital		1,825,000
Retained earnings		49,000
Total stockholders' equity		$1,874,000

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