Saki Corporation began operations on January 1, 2010. The following transactions relating to stockholders’ equity occurred in the first two years of the company’s operations.
2010
Jan. 1 Authorized the issuance of 4 million shares of $1 par value common stock and 25,000 shares of $100 par value preferred stock.
Jan. 2 Issued 700,000 shares of common stock for $15 per share.
Jan. 3 Issued 20,000 common shares in exchange for merchandise inventory valued at $100,000 and
a building valued at $260,000.
Jan. 4 Issued 1,000 common shares to the company’s founders for organization activities. The stock’s market price is $16 on this date.
Jan. 5 Issued 14,000 shares of preferred stock for $125 per share.
2011
June 3 Issued 60,000 shares of common stock for $19 per share.
Other Information:
Saki Corporation reported a net loss of $32,240 in 2010 and net income of $16,735 in 2011. Saki paid no dividends in either year.
Required
1. Prepare journal entries to record these transactions.
2. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2010, and December 31, 2011, based on these transactions.
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