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Nataly_w [17]
3 years ago
15

E15-2 (Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation was organized on January 1, 2014. It is

authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 80,000 shares of common stock for cash at $5 per share.

Mar.1 Issued 5,000 shares of preferred stock for cash at $108 per share.

Apr. 1 Issued24, 000shares of common stock for land. The asking price of the land was$90,000; the fair value of the land was $80,000.

May1 Issued 80,000 shares of common stock for cash at $7 per share.

Aug.1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for services rendered in helping the company organizes.

Sept. 1 Issued 10,000 shares of common stock for cash at $9 per share.

Nov.1 Issued 1,000 shares of preferred stock for cash at $112 per share.

Instructions

Prepare the journal entries to record the above transactions
Business
1 answer:
Mekhanik [1.2K]3 years ago
4 0

Answer:

Explanation:

Jan 10 Issue of common stock for cash

Dr Cash 400,000 [80,000*5]

    Cr Common stock 80,000 [80,000*1]

    Cr Additional paid in capital - Common Stock [80,000*4] 320,000

Mar 1 Issue of preferred stock foor cash

Dr Cash 540,000 [5000*108]

     Cr Preferred stock [5000*1000] 500,000

     Cr Additional Paid in capital - Preferred stock 40,000

Apr 1 Issue of common stock for land

Dr Land 80,000

   Cr Common stock 24,000

   Cr Additional paid in capital - Common stock 56,000

May 1 Issue of common stock for cash

Dr Cash [80,000*7] 560,000

   Cr Common stock [80,000*1] 80,000

   Cr Additional paid in capital - Common stock 480,000

Aug 1

Dr Attorney 50,000

   Cr Common stock [1*10,000] 10,000

   Cr Additional paid in capital - Common stock 40,000

Sep 1  Issue of common stock for cash

Dr Cash [10,000*9] 90,000

   Cr Common stock [10,000*1] 10,000

   Cr Additional paid in capital - Common stock 80,000

Nov 1  Issue of preferred stock foor cash

Dr Cash 112,000 [1000*112]

     Cr Preferred stock [1000*100] 100,000

     Cr Additional Paid in capital - Preferred stock 12,000

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8 0
3 years ago
Presented below is information related to Bobby Engram Company.
Natasha_Volkova [10]

Answer:

A. $ 98,210

B1. Cost to retail percentage 60%

B2. Cost to retail percentage 65.73 %

B3. Cost to retail percentage 58 %

B4. Cost to retail percentage 63.33 %

Explanation:

A. Computation for the ending inventory at retail

Inventory at Retail

Beginning Inventory $ 100,000

Purchase ( Net ) $ 200,000

Net Markup $ 10345

Less Net Markdown ($26,135)

Less Sales Revenue ($ 186,000)

Ending Inventory $ 98,210

Therefore the ending inventory at retail will be $ 98,210

B1) Computation for a cost-to-retail percentage

Excluding both markups and markdowns.

Cost to Retail Percentage

Excluding both Markup and Markdown

Cost Retail

Beginning Inventory $ 58,000 $ 100,000

Purchase (Net) $ 122,000 $ 200,000

Total $ 180,000 $ 300,000

Cost to retail percentage = $180,000/$300,000 Cost to retail percentage = 60%

B2. Computation for a cost-to-retail percentage Excluding Markups but Including Markdown

Cost Retail

Beginning Inventory $ 58,000 $ 100,000

Purchase (Net) $ 122,000 $ 200,000

Less Mark down ($ 26,135)

Total $ 180,000 $273,865

Cost to retail percentage= $180,000 /$ 273,865*100

Cost to retail percentage= 65.73 %

B3. Computation for a cost-to-retail percentage Excluding Markdowns but including Markups

Cost Retail

Beginning Inventory $ 58,000 $ 100,000

Purchase Net $ 122,000 $ 200,000

Add Net Markups $ 10,345

Total $180,000 $ 310,345

Cost to retail percentage = $180,000 / $ 310,345*100

Cost to retail percentage = 58 %

B4. Computation for a cost-to-retail percentage Including both Markups and Markdown

Cost Retail

Beginning Inventory $58,000 $100,000

Purchase Net $ 122,000 $ 200,000

Net Markups $ 10,345

Less Net Mardown ($26,135)

Total $ 180,000 $ 284,210

Cost to retail percentage = $ 180,000/ $ 284,210 × 100

Cost to retail percentage = 63.33 %

Therefore the cost-to-retail percentage are:

B1. Cost to retail percentage 60%

B2. Cost to retail percentage 65.73 %

B3. Cost to retail percentage 58 %

B4. Cost to retail percentage 63.33 %

8 0
3 years ago
Present Value of Ordinary Annuity Period/Rate 5% 6% 7% 8% 9% 10 7.7217 7.3601 7.0236 6.7101 6.4177 11 8.3064 7.8869 7.4987 7.139
klasskru [66]

Answer:

The discount rate of 8% for 11 year period provides the present value of annual cash flows to be equal to the initial investment.

Explanation:

Using the table of present value of annuity provided, we can check the rate and time period which is return the present value of cash flows from the project to be equal to initial Investment.

We are told that the Project's life is expected to be 11 Years. Thus using the 11 year period from the table we can see the following rates,

<u>11 Year Period</u>

Rate = 5%  ,  Annuity Factor = 8.3064  

Rate = 6%  ,  Annuity Factor = 7.8869

Rate = 7%  ,  Annuity Factor = 7.4987

Rate = 8%  ,  Annuity Factor = 7.1390

Rate = 9%  ,  Annuity Factor =  6.8052

We know that the annual cash flows from the project is $1,000,000 and we know the Initial Outlay is $7,139,000.

Multiplying the annual cash flow from the above annuity factors for each rate we can see which rate provides the present value of annual cash flows to be equal to initial outlay.

Rate = 5%  ,  Present value = 8.3064 *  1000000    = $8,306,400  

Rate = 6%  ,  Annuity Factor = 7.8869 *  1000000    = $7,886,900

Rate = 7%  ,  Annuity Factor = 7.4987 *  1000000    = $7,498,700

Rate = 8%  ,  Annuity Factor = 7.1390 *  1000000    = $7,139,000

Rate = 9%  ,  Annuity Factor =  6.8052 *  1000000    = $6,805,200

From the above calculation we can see that the rate of 8% provides the present value of annual cash flows to be equal to the initial investment.

7 0
3 years ago
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