Question

E13-5 Shahidi Corporation engaged in the following share transactions in the first quarter of their fiscal year: Jan. 19 Issued 4,500 common shares for cash of $11.00 per share. Feb. 3 Sold 1,000 $1.50 Class A preferred shares for $15,000 cash to new investors. 11 Received inventory valued at $20,000 and vehicles with market value of $17,000 for 5,800 common shares. Mar. 15 Issued 3,000 $1.00 Class B preferred shares for $14.00 per share.

Required

1. Journalize the transactions. Explanations are not required.

2. How much contributed capital did these transactions generate for Shahidi Corporation?

hint 2 Issuing shares

2. Contributed capital, $143,500

Answer 1

49500 Journal entries for Shahidi corporation date particulars 19-Jan cash to common stock (being shares issued) debit credit 49500 1500 13500 49500 contributed capital common stock class A preferred stock add: additional paid in value excess of par common stock class B preferred stock add: additional paid in value excess of par total contributed capital 15000 37000 3000 39000 15000 42000 143500 3-Feb cash to preferred stock (Class A) (1000*1.5) to additional paid in capital (excess of par) (sale of preferred shares) 1500 13500 20000 170001 11-Feb inventory vehicles to common stock (being shares issued for consideration) 37000 42000 15-Mar cash to class B preferred stock (3000*1) to additional paid in capital (excess of par) (being preferred stock issued) 3000 39000

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