All categories

3 years ago

Prepare journal entries to record each of the following four separate issuances of stock.

Business

1 answer:

lys-0071 [83]3 years ago

3 0

Answer:

DR Cash $48,000

CR Common Stock (4,000*10) $40,000

CR Paid in Excess of Par- Common Stock $8,000

(To record common stock issued for cash)

Working

Paid in Excess of Par- Common Stock = 48,000- 40,000

= $8,000

b.No stated value

DR Organization expenses $57,000

CR Common Stock $57,000

(To record common stock issued to promoters)

DR Organization expenses $57,000

CR Common Stock (2,000 * $3) $6,000

CR Paid in Excess of Par- Common Stock $51,000

(To record common stock issued to promoters)

Working

Paid in Excess of Par- Common Stock = 57,000 - 6,000

= $51,000

DR Cash $107,000

CR Preferred Stock (1,000*50) $50,000

CR Paid in Excess of Par- Preferred Stock $57,000

(To record preferred stock issued for cash)

Working

Paid in Excess of Par- Preferred Stock

= 107,000 - 50,000

= $57,000

You might be interested in

This occurs when a person or firm purchases new capital. This occurs when a person's income exceeds his consumption. Which of th

Lostsunrise [7]

Answer: Buying $200 stock in AT&T is an example of investment. As in this case the persons income exceeds his consumption and he buys new capital.

Borrowing $1000 from a bank to buy a car to use in business is also an investment as in this case buying a car is like investing in a cash flow producing asset, as the car will be an asset which will help earn money from the pizza business.

Explanation:

Roommate depositing $100 is an example of saving and not investing.

Taking out a mortgage and buying a house is an example of consumption and not investment.

3 0

3 years ago

PLEASE HELP, I WILL MARK BRAINLIEST!!! define/describe the following terms. note what the advantages and disadvantages of each a

xeze [42]

The advantages of entrepreneurship include the ability to shape one's own business, control of one's own working habits, and significant stock in the venture. Disadvantages include a lack of guarantee of success and the heightened responsibility of owning a business. Higher take-home pay.
Tax relief on business expenses.
Greater opportunity for tax planning.
Total control of your business and name.
One company for all your business interests.
Limited liability and protection of personal assets.

7 0

2 years ago

Chang Industries has 1,300 defective units of product that already cost $48 each to produce. A salvage company will purchase the

dolphi86 [110]

Answer: Sunk Cost

Explanation:

A sunk cost is an expense which a company or entity has already incurred and which cannot be recovered and so should not be considered when making decisions regarding incremental benefits or costs to an investment.

The $48 had already been incurred to produce the defective units and cannot be recovered so it is a sunk cost that should not be considered moving forward.

7 0

3 years ago

On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the not

k0ka [10]

Answer:

The journal entry would be:

Explanation:

Note: Options are missing so providing the journal entry.

The journal entry would be for recording the collection of the note is:

October 30

Cash A/c.........................Dr $10,150

Interest Revenue A/c.........Cr $150

Notes Receivable A/c.........Cr $10,000

On October 30, the amount is collected so the any increase in cash is debited. Therefore, cash account is debited. And it is collected against a notes Receivable of $10,000 so it leads to decrease in liability, it is credited. Therefore, the notes receivable is credited. And the interest revenue is credited.

5 0

3 years ago

Goodwill is: Group of answer choices Amortized over the greater of its estimated life or forty years. Only recorded by the selle

Tems11 [23]

Explanation:

Goodwill in accounting is an intangible asset that arises when a buyer acquires an existing business. Goodwill represents assets that are not separately identifiable. Goodwill does not include identifiable assets that are capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability regardless of whether the entity intends to do so. Goodwill also does not include contractual or other legal rights regardless of whether those are transferable or separable from the entity or other rights and obligations. Goodwill is also only acquired through an acquisition; it cannot be self-created. Examples of identifiable assets that are goodwill include a company’s brand name, customer relationships, artistic intangible assets, and any patents or proprietary technology. The goodwill amounts to the excess of the "purchase consideration" (the money paid to purchase the asset or business) over the net value of the assets minus liabilities. It is classified as an intangible asset on the balance sheet, since it can neither be seen nor touched. Under US GAAP and IFRS, goodwill is never amortized, because it is considered to have an indefinite useful life. Instead, management is responsible for valuing goodwill every year and to determine if an impairment is required. If the fair market value goes below historical cost (what goodwill was purchased for), an impairment must be recorded to bring it down to its fair market value. However, an increase in the fair market value would not be accounted for in the financial statements. Private companies in the United States, however, may elect to amortize goodwill over a period of ten years or less under an accounting alternative from the Private Company Council of the FASB.

8 0

2 years ago