A) How much stockholders equity does diamondback have at the beginning of the current fiscal year?B) Use the accounting equation and your answer to part (a) to show how you would calculate Diamondback's assets and liabilities at the beginning of the current fiscal year. C) Summarize your findings. ares ofvriter, and (c) that aand the land on which it is located, valued at $800,000, be acquirin accordance with preliminary negotiations by the issuance of 300,000 shares ofmon stock valued at $16.50 per share. The plan was approved by the stockholders andwriter, and (c) that a buildingand the land on which it is located, valued at $800,000, be acquiredaccomplished by the following transactions:Oct. 9. Borrowed $1,500,000 from St. Peter City Bank, giving a 4% mortgage note.17. Issued 20,000 shares of preferred stock, receiving $126 per share in cash.28. Issued 300,000 shares of common stock in exchange for land and a building,according to the plan.instructionsJournalize the entries to record the October transactions.nommoPR 13-3B Selected stock transactionsОBJ. 3, 4,6Diamondback Welding & Fabrication Corporation sells and services pipe welding equip-ment in Illinois. The following selected accounts appear in the ledger of DiamondbackWelding & Fabrication Corporation at the beginning of the current fiscal year:ds,Preferred 2% Stock, $80 par (100,000 shares authorized,. $ 4,800,00060,000 shares issued)...Paid-In Capital in Excess of Par-Preferred Stock .........210,000Common Stock, $9 par (3,000,000 shares authorized,1,750,000 shares issued)15,750,0001,400,000Paid-In Capital in Excess of Par-Common Stock.Retained Earnings.52,840,000

Shareholders' equity is the value of assets available to the company after payment of total…

How much stockholders equity does diamondback have at the beginning of the current fiscal year? B) Use the accounting equation and your answer to part (a) to show how you would calculate Diamondback's assets and liabilities at the beginning of the current fiscal year. C) Summarize your findings.

How much stockholders equity does diamondback have at the beginning of the current fiscal year? B) Use the accounting equation and your answer to part (a) to show how you would calculate Diamondback's assets and liabilities at the beginning of the current fiscal year. C) Summarize your findings.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges

Section: Chapter Questions

Problem 32P

See similar textbooks

Similar questions

The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 300,000.00 shares of common stock with $1.00 par value. The land has been appraised at a market value of 1,200,000.00 Prepare the Journal entries
Martin Corporation is planning to issue 3,000 shares of its own $10 par value common stock for two acres of land to be used as a building site. Instructions a. What general rule should be applied to determine the amount at which the land should be recorded? b. Under what circumstances should this transaction be recorded at the fair value of the land? c. Under what circumstances should this transaction be recorded at the fair value of the stock issued? d. Assume Martin intentionally records this transaction at an amount greater than the fair value of the land and the stock. Discuss this situation.
(Issuance of Stock for Land) Martin Corporation is planning to issue 3,000 shares of its own $10 par value common stock for two acres of land to be used as a building site.Instructions(a) What general rule should be applied to determine the amount at which the land should be recorded?(b) Under what circumstances should this transaction be recorded at the fair value of the land?(c) Under what circumstances should this transaction be recorded at the fair value of the stock issued?(d) Assume Martin intentionally records this transaction at an amount greater than the fair value of the land and the stock.Discuss this situation.
On January 1, 2019, an entity purchased 25% of the outstanding ordinary shares of another entity for P3,000,000. On such date, the carrying amounts of the net assets of the investee amounted to P8,000,000 The carrying amounts of net assets equaled fair value except for land and building. The fair value of land exceeded carrying amount by P2,000,000 and the fair value of building exceeded carrying amount by P3,000,000. The investee reported net income of P1,500,000 and paid dividends of P300,000 in 2019. The building has a remaining life of 5 years. On January 1, 2020, the entity sold 60% of its interest to another entity for P2,500,000. On such date, the fair value of the remaining interest was P1,800,000. The remaining interest was reclassified at FVPL. The investee paid dividend of P200,000 during 2020 and on December 31, 2020, the investee reported net income of P1,000,000. The fair value of the remaining interest on December 31, 2020 is P1,600,000. Question: The carrying amount of…
On January 1, 2019, an entity purchased 25% of the outstanding ordinary shares of another entity for P3,000,000. On such date, the carrying amounts of the net assets of the investee amounted to P8,000,000 The carrying amounts of net assets equaled fair value except for land and building. The fair value of land exceeded carrying amount by P2,000,000 and the fair value of building exceeded carrying amount by P3,000,000. The investee reported net income of P1,500,000 and paid dividends of P300,000 in 2019. The building has a remaining life of 5 years. On January 1, 2020, the entity sold 60% of its interest to another entity for P2,500,000. On such date, the fair value of the remaining interest was P1,800,000. The remaining interest was reclassified at FVPL. The investee paid dividend of P200,000 during 2020 and on December 31, 2020, the investee reported net income of P1,000,000. The fair value of the remaining interest on December 31, 2020 is P1,600,000. Question: The gain on disposal of…
The following additional information was provided: 1) The Authorized Capital of the business is 300,000 Ordinary Shares of Sh.0.50 each and 75,000 8% preference shares of Sh. 1.00 each. 2) A final dividend of Sh.0.625 per ordinary share is proposed. 3) The Reserve for Increased Replacement costs of Fixed Assets is to be increased to Sh.20,000. (i) A profit and Loss Appropriation Account for the year to 31st December 2019. (ii) Statement of Financial position as at the same date.
The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: i) KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues $350,00 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,350,000. ii) The company sold 110,000 shares of common stock with $1 par value. iii) Issued 22,000 shares of $18 par value preferred stock. Shares were issued at par. iv) Earned net income of $850,000. v) Dividend declared and paid - $0.15 per share on common stock vi) Dividend declared and paid - $5 per share on preferred stock Using the information above and as guided: B. Prepare the owner’s equity section of the balance sheet based on the info above.
The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: i) KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues $350,00 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,350,000. ii) The company sold 110,000 shares of common stock with $1 par value. iii) Issued 22,000 shares of $18 par value preferred stock. Shares were issued at par. iv) Earned net income of $850,000. v) Dividend declared and paid - $0.15 per share on common stock vi) Dividend declared and paid - $5 per share on preferred stock Using the information above and as guided: A. Prepare the Journal entries and closing entries for the above transaction
On January 1, 20X1, Entity A and Entity B, both public entities, incorporated Entity C by investing P3,000,000 and P2,000,000 for a capital interest ratio of 60:40. The contractual agreement of the incorporating entities provided that the decisions on relevant activities of Entity C will require unanimous consent of both Moreover, Entity A and Entity B will have rights to the net assets of Entity C. The financial statements of Entity C provided the following data for 20X1: Entity C reported a net income of P1,000,000 for 20X1 and paid cash dividends of P400,000 on December 31, During 20X1, Entity C sold inventory to Entity A with a gross profit of P50,000. 80% of those inventories were resold by Entity A to third persons during The remainder was resold to third persons during 20X1. On July 1, 20X1, Entity C sold a piece of machinery to Entity B at a loss of P20,000. At the time of sale, the machinery has remaining useful life of two (2) Determine the following: The investment…
The company's charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration. i) KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 390,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,520,000. ii) The company sold 140,000 shares of common stock with $1 par value. iii) Issued 26,000 shares of $22 par value preferred stock. Shares were issued at par. iv) Earned net income of $950,000 v) Dividend declared and paid-$0.15 per share on common stock. vi) Dividend declared and paid-$5 per share on preferred stock. Required: a) Prepare the Journal entries and closing entries for the above transaction
The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: i) KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 400,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,480,000. ii) The company sold 110,000 shares of common stock with $1 par value. iii) Issued 24,000 shares of $14 par value preferred stock. Shares were issued at par. iv) Earned net income of $1,000,000 v) Dividend declared and paid - $0.15 per share on common stock vi) Dividend declared and paid - $5 per share on preferred stock Using the information above and as guided: Prepare the Journal entries and closing entries for the above transaction Prepare the owner’s equity section of the balance sheet based on the info above.
The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: i) KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 400,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,480,000. ii) The company sold 110,000 shares of common stock with $1 par value. iii) Issued 24,000 shares of $14 par value preferred stock. Shares were issued at par. iv) Earned net income of $1,000,000 v) Dividend declared and paid - $0.15 per share on common stock vi) Dividend declared and paid - $5 per share on preferred stock Using the information above and as guided: Prepare the closing entries for the above transaction