BUSINESS AND FINANCE

Problem 13-1A (Part level Submission)

 

DeLong 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 $2 per share. The following stock transactions were completed during the first year.

Jan. 10 Issued 80,000 shares of common stock for cash at $4 per share.

Mar. 1 Issued 5,000 shares of preferred stock for cash at $105 per share.

Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000. The fair value of the land was $85,000.

May. 1 Issued 80,000 shares of common stock for cash at $4.5 per share.

Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $30,000 for services performed in helping the company organize.

Sept. 1 Issued 10,000 shares of common stock for cash at $5 per share.

Nov. 1 Issued 1,000 shares of preferred stock for cash at $109 per share.

 

A) Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Jan. 10

Account titles and explanation Debt Credit
Cash  =80,000 x 4 320,000  
Common stock =80,000 x 2 ($4-$2)   160,000
Paid-in Capital in Excess of Stated Value-Common Stock = 80,000 x 2   160,000

 

Mar. 1

Account titles and explanation Debt Credit
Cash 525000  
Preferred stock   500,000
Paid-in Capital in Excess of Par-Preferred Stock   25,000

 

Cash = 5,000 x 105 =525000

Preferred Stock = 5,000 x 100 =500,000

Paid-in Capital in Excess of Par-Preferred Stock = 5,000 x 5 =25,000

 

 

 

Apr. 1

Account titles and explanation Debt Credit
Land 85,000  
Common stock   48,000
Paid-in Capital in Excess of Stated Value-Common Stock   37,000

 

Common Stock = 24,000 x 2 =48,000

Paid-in Capital in Excess of Stated Value-Common Stock =85,000 – 48,000 =37,000

 

May. 1

Account titles and explanation Debt Credit
Cash 360,000  
Common stock   160,000
Paid-in Capital in Excess of Stated Value-Common Stock   200,000

 

Cash = 80,000 x 4.5 = 360,000

Common Stock = 80,000 x 2 = 160,000

Paid-in Capital in Excess of Stated Value-Common Stock = 80,000 x 2.50 =200,000

 

Aug. 1

Account titles and explanation Debt Credit
Organization Expense 30,000  
Common stock   20,000
Paid-in Capital in Excess of Stated Value-Common Stock   10,000

 

Common Stock =10,000 x 2 = 20,000

Paid-in Capital in Excess of Stated Value-Common Stock = 30,000 – 20,000 =10,000

 

 

 

Sept. 1

Account titles and explanation Debt Credit
Cash 50,000  
Common stock   20,000
Paid-in Capital in Excess of Stated Value-Common Stock   30,000

 

Cash = 10,000 x 5 = 50,000

Common Stock = 10,000 x 2= 20,000

Paid-in Capital in Excess of Stated Value-Common Stock = 10,000 x 3 = 30,000

 

Nov. 1

Account titles and explanation Debt Credit
Cash 109,000  
Preferred Stock   100,000
Paid-in Capital in Excess of Par-Preferred Stock   9,000

 

Cash = 1,000 x 109=109,000

Preferred Stock = 1,000 x 100=100,000

Paid-in Capital in Excess of Par-Preferred Stock = 1,000 x 9=9,000

 

B) Post to the stockholders’ equity accounts. (Post entries in the order of journal entries presented in the previous part.)

Preferred Stock

Date Debt Credit Balance
Mar. 1

 

  500,000 500,000
Nov. 1

 

  100,000 600,000

Common Stock

Date Debt Credit Balance
Jan. 10

 

  160,000 160000
Apr. 1   48,000 208,000
May. 1   160,000 368,000
Aug. 1   20,000 388,000
Sept. 1   20,000 408,000

 

Paid-in Capital in Excess of Par-Preferred Stock

Date Debt Credit Balance
Mar. 1

 

  25,000 25,000
Nov. 1

 

  9,000 34,000

 

 

Paid-in Capital in Excess of Stated Value-Common Stock

Date Debt Credit Balance
Jan. 10

 

  160,000 160000
Apr. 1   37000 197,000
May. 1   200,000 397,000
Aug. 1   10,000 407,000
Sept. 1   30,000 437,000

 

Order now and get 10% discount on all orders above $50 now!!The professional are ready and willing handle your assignment.

ORDER NOW »»