Scenario: Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. Requirements: 1. Assume one year later (2019) the company KY Jeweller’s Ltd has been formed and the owners are desirous of companying several financial transactions and possible outcomes to assist in guiding their decision-making process. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information which is grouped according to your fist name initial. (Hint!!!! Example fist name Michael will use the initial M and that person should only use the info presented in line with the heading with their first name initial. You are not allowed to use info associated other initials other than that of your own as this will result in the forfeiture of the grade.) 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 ___ shares of common stock with $1.00 par value. The land has been appraised at a market value of ____ First Name Initial # of shares issued Value of land D, T, L, U 410,000 $1,560,000 ii) The company sold ___ shares of common stock with $1 par value. First Name Initial # of shares issued D, T, L, U 155,000 iii) Issued ___ shares of $___ par value preferred stock. Shares were issued at par. First Name Initial # of shares issued Par value D, T, L, U 25,000 $19 iv) Earned net income of $___ First Name Initial Net Income D, T, L, U $880,000 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. B. Prepare the owner’s equity section of the balance sheet based on the info above.
Scenario:
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership,
Requirements:
1. Assume one year later (2019) the company KY Jeweller’s Ltd has been formed and the owners are desirous of companying several financial transactions and possible outcomes to assist in guiding their decision-making process. They have asked each student from your accounting course to prepare the company’s
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 ___ shares of common stock with $1.00 par value. The land has been appraised at a market value of ____
|
First Name Initial |
# of shares issued |
Value of land |
|
D, T, L, U |
410,000 |
$1,560,000 |
ii) The company sold ___ shares of common stock with $1 par value.
|
First Name Initial |
# of shares issued |
|
D, T, L, U |
155,000 |
iii) Issued ___ shares of $___ par value preferred stock. Shares were issued at par.
|
First Name Initial |
# of shares issued |
Par value |
|
D, T, L, U |
25,000 |
$19 |
iv) Earned net income of $___
|
First Name Initial |
Net Income |
|
D, T, L, U |
$880,000 |
v) Dividend declared and paid - $0.15 per share on common stock
vi) Dividend declared and paid - $5 per
Using the information above and as guided:
A. Prepare the Journal entries and closing entries for the above transaction.
B. Prepare the owner’s equity section of the balance sheet based on the info above.
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