H. Tillman performed legal services for J. Laney. Due to a cash shortage, an agreement was reached whereby J. Laney, would pay H. Tillman a legal fee of approximately $11900 by issuing 2900 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $4.60 per share. Given this information, the journal entry for J. Laney. to record this transaction is:
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- In September, the company entered the following transactions: Sept. 1 Issued common shares to Tony Ferria and other investors in exchange for $100,000 cash. Sept 1 Paid $9,000 to Wellington Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It Sept 1 Purchased for $180,000 all the equipment formerly owned by Rent-It. Paid $70,000 cash and issued a one-year note payable for $110,000, plus interest at the annual rate of 9%. This rental equipment is estimated to have a 10-year useful life. Sept 4 Purchased office supplies on account from Modern Office Co., $1,630. Payment due in 30 days. (These supplies are expected to last for several months.) Sept 8 Received $10,000 cash from McFadden Construction Co. as advance payment for equipment rental. Sept 12 Paid salaries for the first two weeks in September, $3,600. Sept 15 Excluding the McFadden…To obtain all of the stock of Molly, Inc., Harrison Corporation issued its own common stock. Harrison had to pay $98,000 to lawyers, accountants, and a stock brokerage firm in connection with services rendered during the creation of this business combination. In addition, Harrison paid $56,000 in costs associated with the stock issuance. How will these two costs be recorded?East Co. issued 1,000 shares of its $5 par common stock toHowe as compensation for 1,000 hours of legal services performed.Howe usually bills $160 per hour for legal services. Onthe date of issuance, the stock was trading on a public exchange at$140 per share. By what amount should the additional paid-incapital account increase as a result of this transaction?
- EEE has been very successful in operating his business for the last five years. His financial statements showed total assets of P380,000 and liabilities of P50,000. He invited FFF to join him by investing an amount enough to give him a 30% interest in the firm. Profit and loss agreement provides 80:20 to EEE and FFF, respectively. Before the formation, the parties agreed to make the following adjustments in the books of EEE:· Allowance for doubtful accounts amounting to P10,000 be established.· The merchandise should be adjusted to include goods out on consignment amounting to P25,000.· Accrued utilities of P2,500 be recognized.How much is the amount to be invested by FFF?Brown Company issued 100,000 shares of its $1 par common stock to the Mary Keim law firm as compensation for 4,000 hours of legal services performed. Keim’s usual rate is $240 per hour. By what amount should Brown’s paid-in capital—excess of par increase as a result of this transaction?Prepare general journal entries for the following transactions, identifying each transaction by letter:(a) Gnu Company issued 5,000 shares of $1 par common stock to the Prendergas law firm as partial payment of fees incurred to incorporate the business. Gnu was short of cash, so Prendergas agreed to accept $10,000 cash and the shares of common stock in full settlement of its bill for $55,000.(b) Gnu issued 50,000 shares of $1 par common stock in exchange for a parcel of land for building a shopping plaza. (The list price for the land was $400,000; a similar parcel in the same area sold last week for $380,000. During the past month, the price at which Gnu’s common stock has traded on the open market has ranged from $5 to $12 per share. Two trades occurred yesterday at $7 and $10 per share.)(c) Gnu purchased 10,000 shares of $1 par value common treasury stock for $70,000. (This is the only treasury stock that Gnu holds.)(d) Gnu sold 4,000 shares of common treasury stock for $32,000.(e)…
- Shott Farm Supplies Corporation purchased 800 shares of General Motors stock at $50 per share and paid a brokerage fee of $1,200. Two months later, the shares were sold for $53 per share. The brokerage fee on the sale was $1,300. Required: Prepare entries for the purchase and the sale.ABC was formed by an investor who exchanged 1,000,000 for 100,000 shares of stock on August 1. ABC prepaid 18 months of rent by paying $96,000. ABC hired 3 employees and agreed to pay each $100,000/year. ABC agreed to pay at the end of each month; after the services are performed. ABC withholds 20% for federal tax; 5% for state tax; and 7.65% for FICA. ABC sold services over the year for $1,200,000 on account. They warranty their work for 1 year. ABC estimated 1% for bad debts using the percent of sales method. ABC estimated $100,000 in warranty work, but only paid out $20,000 (as cash back) in warranties through the end of the year. ABC received $400,000 in cash against the receivable by year-end. On 8/15 ABC purchased equipment signing a note for $400,000. ABC depreciated the equipment by $60,000 for book purposes and $50,000 for tax purposes. ABC accrued $6,000 in interest expense. On 8/1 ABC invested $200,000 into muni-bonds. The bonds paid $9,000 in interest. ABC driver got a…For each of the following situations, indicate the amount shown as a liability on the balance sheet of Cooper, Inc., at December 31: c. During November and December of the current year, Cooper sold products to a firm and guaranteed them against product failure for 90 days. Estimated costs of honoring this provision next year are $2,200. Answer d. On December 15, Cooper declared a $60,000 cash dividend payable on January 15 of the following year to shareholders of record on December 31. Answer e. Cooper provides a profit-sharing bonus for its executives equal to five percent of the reported before‑tax income for the current year. The estimated before‑tax income for the current year is $800,000.
- On November 1 of the current year, Rob Elliot invested $30,000 of his cash to form a corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000.00. After all transactions have been entered into the accounting equation for the month of December, the ending balances for selected items on December 31 follow. On that date, the financial statements were prepared. The balance sheet reported total assets of $56,900 and total stockholders' equity of $38,445. 5. By what amount did retained earnings increase or decrease during the period 6. What is the amount of profit or loss during December ? 7. What were the total expenses for December ?Matthew Company issues 4,000 ordinary shares to its external lawyers for services related to the successful completion of a lawsuit that Matthew Company is currently defending. The lawyers spent 250 hours working on the case. On the basis of recent invoices from the lawyers, Matthew Company determines the fair value of the services received to be P1,400 per hour. The quoted price of the shares was P58. The amount to be reported as expense in relation to legal services received is.On November 1 of the current year, Rob Elliot invested $30,500.00 of his cash to form a corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000.00. After all transactions have been entered into the accounting equation for the month of December, the ending balances for selected items on December 31 follow. On that date, the financial statements were prepared. The balance sheet reported total assets of $54,400.00 and total stockholders' equity of $38,955.00. 2. What is the retained earnings amount reported on December 31? 3. How much does GGE Enterprises Inc. owe to its creditors? 4. How much cash is being held by GGE Enterprises Inc.? 5. By what amount did retained earnings increase or decrease during the period? 6. What is the amount of profit or loss during December?