ACC 302 Take Home Exam #1
The following transactions relate to the stockholders' equity transactions of Lindsay Corporation for its initial
year of existence.
Articles of incorporation are filed with the state. The state authorized the is-
suance of 10,000 shares of $50 par value preferred stock and 200,000 shares
of $10 par value common stock.
40,000 shares of common stock are issued for $14 per share.
80,000 shares of common stock are issued in exchange for land and build-
ings that have an appraised value of $250,000 and $1,000,000, respectively.
The stock traded at $15 per share on that date on the over-the-counter mar-
2,000 shares of common stock are issued to Shane and Winston, Attorneys-
at-Law, in payment for legal services rendered in connection with incorpora-
tion. The company charged the amount to organization costs. The market
value of the stock was $16 per share.
Received subscriptions for 10,000 shares of preferred stock at $53 per share.
A 40 percent down payment accompanied the subscriptions. The balance is
due on October 1.
Received the final payment for 10,000 shares.
Prepare journal entries to record the foregoing transactions. Identify the entries by letter (a - f).
The accounts from the stockholders' equity section of the balance sheet of Western Company showed the fol-
lowing at December 31, 2004:
Common Stock .
Paid-in Capital in Excess of Par .
Retained Earnings .
Western issued 475,000 shares of the $1 par value common stock on January 1, 2004.
The company also is authorized to issue 500,000 shares of $5 par value, 6% preferred stock.
During 2005, Western had the following transactions:
Issued an additional 90,000 shares of common stock at $17 per share.
Issued 100,000 shares of preferred stock at $8 per share.
The board of directors authorized the appropriation of $295,000 of retained earnings
for the purchase of equipment.