On January 2, 2011, Blueman Corporation was incorporated in the province of Ontario. It was authorized to issue an unlimited number of no-par value common shares, and 25,000 shares of no-par, $8, cumulative and non-participating preferred. During 2011, the firm completed the following transactions: Jan 8 Accepted subscriptions for 34,000 common shares at $12 per share. Down payment received on the subscribed shares was 50%. Jan 30 Issued 10,000 preferred shares in exchange for the following assets: machinery with a fair market value of $50,000, a factory with a fair market value of $200,000, and land with an appraised value of $120,000. Mar 15 Machinery with a fair market value of $85,000 was donated to the company. Apr 25 Collected the balance of the subscriptions receivable on only 30,000 shares and issued common shares. A customer defaulted on the last payment on a subscription for 4,000 shares. The company policy is to issue the proportion paid up to date for customers that default. June 30 Purchased 2,200 common shares at $18 per share. The shares were retired. Dec 31 Declared sufficient cash dividends to allow a $1 per share dividend for outstanding common shares. The dividend is payable on January 10, 2012, to shareholders of record on January 5, 2012. Dec 31 Closed the income summary to retained earnings. The income for the period was $225,000. Required:
( Prepare the journal entries to record the above transactions.
(Prepare the shareholders’ equity section of the balance sheet for Blueman Corporation at December 31, 2011.
Blueman corporation | |||
Journal entries | |||
Date | Debit | Credit | |
Jan 8. | Cash | $ 2,04,000 | |
Common stock | $ 2,04,000 | ||
Jan 30. | Machinery | $ 50,000 | |
Factory | $ 2,00,000 | ||
Land | $ 1,20,000 | ||
Preferred stock | $ 3,70,000 | ||
Mar 15. | Machinery | $ 85,000 | |
Donation | $ 85,000 | ||
Aprl 25 | Cash | $ 1,80,000 | |
Common stock | $ 1,80,000 | ||
Jun 30. | Common Stock | $ 26,400 | |
Additional paid in-excess of capital | $ 13,200 | ||
Cash | $ 39,600 | ||
Dec 31. | Retained Earnings | $ 32,000 | |
Dividend payable | $ 32,000 |
Balance sheet (partly) | |||
December 31, 2018 | |||
Assets | $ | Liabilities | $ |
Cash | 344400 | Dividend payable | 32000 |
Other assets (Balance figure) | 140000 | ||
Property, plan & equipment | Stockholder's Equity | ||
Machinery | 135000 | Preferred stock | 370000 |
Factory | 200000 | Common stock | |
Land | 120000 | 30,000 shares fully paid up | 360000 |
4,000 Partly paid | 24000 | ||
less: Purchases 2200*12 | 26400 | ||
357600 | |||
Retained earnings | 193000 | ||
less: additional paid-excess of capital(2200*6 (18-12)) | 13200 | ||
Total stockholder's equity | 907400 | ||
Total | 939400 | Total | 939400 |
Workings:
i) Retained earnings = Income - dividend payable = $ 225,000-32,000 = 193,000
ii) Deficit in asset side is assumed as other assets
iii) Machinery = $ 50,000 + $ 85,000 (donated) = $ 135,000
iv) dividend payable = 30,000 (fully paid up shares) x $ 1 + 4000(50% paid up) * $ 1*50% = 32,000
On January 2, 2011, Blueman Corporation was incorporated in the province of Ontario. It was authorized...
CINRICH Corporation was organized on January 1, 2018. It is authorized to issue 22,000 shares of $3-noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the first year. Jan. 1 Issued 84,000 common shares for cash at $3 per share. Mar. 1 Issued 12,500 preferred shares for cash at $57 per share. May 1 Issued 116,000 common shares for cash at $5 per share. Sept. 1 Issued 4,800 common shares for cash...
P13-1B Joanjim Corporation was organized on January 1, 2012. It is authorized to issue 20,000 shares of 6%, 340 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 100,000 shares of common stock for cash at $3 per share. Mar. issued 10,000 shares of preferred stock for cash at $55 per share. Apr. 1 May Issued 25,000...
The following transactions relate to the stockholders' equity transactions of Lindsay Corporation for 2018, its first year of existence. Articles of incorporation are filed with the state. The state authorized the issuance of 10,000 shares of 6%, $50 par value preferred stock and 200,000 shares of $1 par value common stock. January 28 40,000 shares of common stock are issued for $15 per share. 70,000 shares of common stock are issued in exchange for land and buildings that have a...
On January 1, 2020, Kevin Malone Corporation received a charter granting the right to issue 8,000 shares of $80 par value, 9% cumulative and nonparticipating preferred stock, and 65,000 shares of $12 par value common stock. It then completed these transactions. Jan. 11 Issued 15,000 shares of common stock at $20 per share. Feb. 1 Issued to Sanchez Corp. 6,500 shares of preferred stock for the following assets: equipment with a fair value of $45,000; a factory building with a...
On December 29, 2019, Hade Company was authorized to issue 100,000 shares of $5 par value preferred stock and 600,000 shares of $30 par value common stock. It then completed the following transactions in the month of January 2020: Jan. 6Issues 60,000 shares of common stock at $36 per share for cash. Jan. 19 Issued 2,000 shares of preferred stock for $70,000 cash. Jan. 26 Exchanged 55,000 share of common stock for the following assets at the indicated fair market...
Teal Corporation was organized on January 1, 2017. It is authorized to issue 9,400 shares of 8%, $100 par value preferred stock, and 537,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 80,740 shares of common stock for cash at $6 per share. Mar. 1 Issued 5,980 shares of preferred stock for cash at $109 per share. Apr. 1 Issued 24,200 shares...
Whispering Corporation was organized on January 1, 2020. It is authorized to issue 9,200 shares of 8%, $100 par value preferred stock, and 538,600 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 80,120 shares of common stock for cash at $6 per share. Mar. 1 Issued 5,470 shares of preferred stock for cash at $112 per share. Apr. 1 Issued 24,910 shares...
On January 5, 2020, Whispering Corporation received a charter granting the right to issue 5,300 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 46,700 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,000 shares of common stock at $17 per share. Feb. 1 Issued to Sanchez Corp. 4,400 shares of preferred stock for the following assets: equipment with a fair value of $47,300; a factory building with a fair...
Pronghorn Corporation showed the following information on its financial statements on December 31, 2021: Preferred Shares, no par value $5 cumulative, 380,000 shares authorized, 190,000 shares issued and outstanding $34,200,000 Common Shares, no par value, unlimited shares authorized, 450,000 shares issued and outstanding $13,500,000 The following transactions occurred, in the order given, during 2022: (a) April 15: Received subscriptions and down payments for 115,000 common shares at $38 per share. The subscription contracts call for 55% of the subscription price...
Grouper Corporation showed the following information on its financial statements on December 31, 2021: Preferred Shares, no par value $8 cumulative, 400,000 shares authorized, 140,000 shares issued and outstanding $28,000,000 Common Shares, no par value, unlimited shares authorized, 460,000 shares issued and outstanding $12,420,000 The following transactions occurred, in the order given, during 2022: (a) April 15: Received subscriptions and down payments for 117,000 common shares at $36 per share. The subscription contracts call for 65% of the subscription price...