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san4es73 [151]
3 years ago
10

Diane's Designs has two classes of stock authorized: 8%, $10 par value preferred and $1 par value common. As of January 1, 2021,

the following accounts had the following balances: Common Stock $10,000, preferred stock $5,000, retained earnings was $9,600. The following transactions affect stockholders' equity during 2021, its first year of operations: January 1-Dec. 31 Net Income $25,000 January 1 Issue 200,000 shares of common stock for $15 per share. February 6 Issue 1,000 shares of preferred stock for $11 per share. October 10 Purchase 10,000 shares of its own common stock for $18 per share. November 12 Resell 5,000 shares of treasury stock at $20 per share. December 31 Paid dividends of $3,000 What is the balance in common stock, preferred stock, additional paid in capital, treasury stock and retained earnings at the end of 2021
Business
1 answer:
devlian [24]3 years ago
8 0

Answer:

Common stock = $210,000

Preferred stock = $15,000

Additional paid in capital = $2,801,000

Treasury stock  =    $120,000

Retained earnings = $31,600

Explanation:

Diane's Designs has two classes of stock authorized: 8%, $10 par value preferred and $1 par value common.

As of January 1, 2021, the following accounts had the following balances: Common Stock $10,000, preferred stock $5,000, retained earnings was $9,600.

The following transactions affect stockholders' equity during 2021, its first year of operations: January 1-Dec. 31 Net Income $25,000

January 1 Issue 200,000 shares of common stock for $15 per share.

JOURNAL ENTRIES

Dr. Bank.......................3,000,000

Cr. Common stock.......................200,000

Cr. Additional Paid-in capital..2,800,000

February 6 Issue 1,000 shares of preferred stock for $11 per share.

JOURNAL ENTRIES

Dr. Bank.......................11,000

Cr. Preferred stock.......................10,000

Cr. Additional Paid-in capital.......1,000

October 10 Purchase 10,000 shares of its own common stock for $18 per share.

JOURNAL ENTRIES

Dr. Treasury Stock.......................180,000

Cr. Bank........................................................180,000

November 12 Resell 5,000 shares of treasury stock at $20 per share.

JOURNAL ENTRIES

Dr. Bank..............60,000

Cr. Treasury Stock.......................60,000

December 31 Paid dividends of $3,000

The closing balances can be computed as beginning balances + changes in the year = closing balances:

Common stock = 10,000 + 200,000 = $210,000

Preferred stock =  5,000 + 10,000 =    $15,000

Additional paid in capital = 2,800,000 + 1,000 = $2,801,000

Treasury stock  = 180,000 - 60,000 = $120,000

Retained earnings 9,600 + 25,000 - 3,000 = $31,600

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during its first year of operations, silverman company paid $11,440 for direct materials and $9,900 for production workers' wage
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The amount of finished goods inventory on the balance sheet at year-end is $11,880

What is the cost of producing 5,600 units?

The cost of producing the finished goods of 5,600 units is the sum of direct materials, workers' wages and lease payments and utilities on the production facilities

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