Ava School of Learning obtained a charter at the start of the year that authorized 50,000 shares of no-par common stock and 20,000 shares of preferred stock, par value $10. During the year, the following selected transactions occurred: Collected $47 cash per share from four individuals and issued 5,700 shares of common stock to each.Issued 6,700 shares of common stock to an outside investor at $47 cash per share.Issued 8,700 shares of preferred stock at $18 cash per share.Required:Prepare the journal entries indicated for each of these transactions.Prepare the stockholders’ equity section of the balance sheet at December 31. At the end of the year, the accounts reflected net income of $43,000. No dividends were declared.

Answer - Stockholders’ Equity - Paticulars Amount Contributed Capital: Preferred Stock…

Answered: Ava School of Learning obtained a…

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 1MP: Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--,...

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Ava School of Learning obtained a charter at the start of the year that authorized 50,000 shares of no-par common stock and 20,000 shares of preferred stock, par value $10. During the year, the following selected transactions occurred:

Collected $47 cash per share from four individuals and issued 5,700 shares of common stock to each.
Issued 6,700 shares of common stock to an outside investor at $47 cash per share.
Issued 8,700 shares of preferred stock at $18 cash per share.

Required:

Prepare the journal entries indicated for each of these transactions.
Prepare the stockholders’ equity section of the balance sheet at December 31. At the end of the year, the accounts reflected net income of $43,000. No dividends were declared.

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