Question

Bob, Chris, and John decided to liquidate their business partnership. The current capital balance of each is $12,000, $76,000, and $104,000, and they share profit or loss as 1:2:2 respectively. Currently, the partnership has $19,000 in cash, $218,000 in non-cash assets, and owes $45,000 in liabilities.

Make the journal entries for these business transactions:   

a. issued 50,000 share ($10 par value) and received $680,000 in cash

b. Purchased 20,000 Treasury Stocks at $27 each. The stock has a par value of $10

c.To form new partnership, Bob contributed $18,000 cash and Mike gave office equipment worth $16,500

d.15,000 of Treasury Stocks purchased in b. above were sold at $43 each

e. A corporation has 10,000 Preferred Stock (PS) outstanding. The corporation declared cash dividend of $2.19 for each PS and $0.59 for each Common Stock. See a., b., and d. above for outstanding Common Stock

f. The corporation paid dividend declared in e. above

Answer 1

Journal Entries
date	explanation	debit	credit
A-	cash	680000
	common stock		500000
	additional paid in capital		180000
B-	treasury stock	540000
	cash		540000
C-	cash	18500
	office building	16500
	common stock		35000
D-	cash	645000
	treasury stock		405000
	additional paid in capital-treasury stock		240000
E-	dividend-preferred stock	21900
	dividend-common stock	26550
	dividend payable-common stock		26550
	dividend payable-preferred stock		21900
F-	dividend payable-common stock	26550
	dividend payable-preferred stock	21900
	cash		48450