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ACC302-Take-Home-Exam1-NO - ACC 302 Take Home Exam#1...

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ACC 302 Take Home Exam #1 Problem 1. The following transactions relate to the stockholders' equity transactions of Lindsay Corporation for its initial year of existence. (a) Jan. 7 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. (b) Jan. 28 40,000 shares of common stock are issued for $14 per share. (c) Feb. 3 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- ket. (d) Feb. 24 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. (e) Sep. 12 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. (f) Oct. 1 Received the final payment for 10,000 shares. Prepare journal entries to record the foregoing transactions. Identify the entries by letter (a - f). 2. The accounts from the stockholders' equity section of the balance sheet of Western Company showed the fol- lowing at December 31, 2004: Common Stock .......................................... $ 475,000 Paid-in Capital in Excess of Par ...................... 6,650,000 Retained Earnings ..................................... 787,500 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: Jan. 10 Issued an additional 90,000 shares of common stock at $17 per share. Apr. 1 Issued 100,000 shares of preferred stock at $8 per share. July 19 The board of directors authorized the appropriation of $295,000 of retained earnings for the purchase of equipment. Oct. 23 Sold an additional 60,000 shares of preferred stock at $9 per share.
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