Stock Transactions for Corporate Expansion Vaga Optics produces medical lasers for use in hospitals. The following accounts and their balances appear in the ledger of Vaga Optics on December 31 of the current year: Preferred 2% Stock, $120 par (50,000 shares authorized, 25,000 shares issued) $ 3,000,000 Paid-In Capital in Excess of Par—Preferred stock 400,000 Common stock, $75 par (500,000 shares authorized, 300,000 shares issued) 22,500,000 Paid-In Capital in Excess of Par—Common stock 540,000 Retained Earnings 55,000,000 At the annual stockholders' meeting on January 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $9,500,000. The plan provided (a) that the corporation borrow $4,500,000, (b) that 20,000 shares of the unissued Preferred stock be issued through an underwriter, and (c) that a building, valued at $1,200,000, and the land on which it is located, valued at $900,000, be acquired in accordance with preliminary negotiations by the issuance of 27,400 shares of Common stock. The plan was approved by the stockholders and accomplished by the following transactions: Mar. 8. Borrowed $4,500,000 from Conrad National Bank, giving a 6% mortgage note. 13. Issued 20,000 shares of Preferred stock, receiving $130 per share in cash. 26. Issued 27,400 shares of Common stock in exchange for land and a building, according to the plan. No other expansion-related transactions occurred during March. Instructions: Illustrate the effects on the accounts and financial statements of the Mar. 8. transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity = + Mar. 8. fill in the blank 4 fill in the blank 5 fill in the blank 6 Statement of Cash Flows Income Statement fill in the blank 8 fill in the blank 10 Illustrate the effects on the accounts and financial statements of the Mar. 13 transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity = + + Mar. 13. fill in the blank 15 fill in the blank 16 fill in the blank 17 fill in the blank 18 Statement of Cash Flows Income Statement fill in the blank 20 fill in the blank 22 Illustrate the effects on the accounts and financial statements of the Mar. 26 transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity + = + + Mar. 26. fill in the blank 28 fill in the blank 29 fill in the blank 30 fill in the blank 31 fill in the blank 32 Statement of Cash Flows Income Statement fill in the blank 34 fill in the blank 36

Stock Transactions for Corporate Expansion Vaga Optics produces medical lasers for use in hospitals. The following accounts and their balances appear in the ledger of Vaga Optics on December 31 of the current year: Preferred 2% Stock, $120 par (50,000 shares authorized, 25,000 shares issued) $ 3,000,000 Paid-In Capital in Excess of Par—Preferred stock 400,000 Common stock, $75 par (500,000 shares authorized, 300,000 shares issued) 22,500,000 Paid-In Capital in Excess of Par—Common stock 540,000 Retained Earnings 55,000,000 At the annual stockholders' meeting on January 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $9,500,000. The plan provided (a) that the corporation borrow $4,500,000, (b) that 20,000 shares of the unissued Preferred stock be issued through an underwriter, and (c) that a building, valued at $1,200,000, and the land on which it is located, valued at $900,000, be acquired in accordance with preliminary negotiations by the issuance of 27,400 shares of Common stock. The plan was approved by the stockholders and accomplished by the following transactions: Mar. 8. Borrowed $4,500,000 from Conrad National Bank, giving a 6% mortgage note. 13. Issued 20,000 shares of Preferred stock, receiving $130 per share in cash. 26. Issued 27,400 shares of Common stock in exchange for land and a building, according to the plan. No other expansion-related transactions occurred during March. Instructions: Illustrate the effects on the accounts and financial statements of the Mar. 8. transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity = + Mar. 8. fill in the blank 4 fill in the blank 5 fill in the blank 6 Statement of Cash Flows Income Statement fill in the blank 8 fill in the blank 10 Illustrate the effects on the accounts and financial statements of the Mar. 13 transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity = + + Mar. 13. fill in the blank 15 fill in the blank 16 fill in the blank 17 fill in the blank 18 Statement of Cash Flows Income Statement fill in the blank 20 fill in the blank 22 Illustrate the effects on the accounts and financial statements of the Mar. 26 transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity + = + + Mar. 26. fill in the blank 28 fill in the blank 29 fill in the blank 30 fill in the blank 31 fill in the blank 32 Statement of Cash Flows Income Statement fill in the blank 34 fill in the blank 36

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

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--,...

See similar textbooks

Related questions

Concept explainers

Question

100%

Stock Transactions for Corporate Expansion

Vaga Optics produces medical lasers for use in hospitals. The following accounts and their balances appear in the ledger of Vaga Optics on December 31 of the current year:

Preferred 2% Stock, $120 par (50,000 shares authorized, 25,000 shares issued)		$ 3,000,000
Paid-In Capital in Excess of Par—Preferred stock		400,000
Common stock, $75 par (500,000 shares authorized, 300,000 shares issued)		22,500,000
Paid-In Capital in Excess of Par—Common stock		540,000
Retained Earnings		55,000,000

At the annual stockholders' meeting on January 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $9,500,000. The plan provided (a) that the corporation borrow $4,500,000, (b) that 20,000 shares of the unissued Preferred stock be issued through an underwriter, and (c) that a building, valued at $1,200,000, and the land on which it is located, valued at $900,000, be acquired in accordance with preliminary negotiations by the issuance of 27,400 shares of Common stock. The plan was approved by the stockholders and accomplished by the following transactions:

Mar.	8.	Borrowed $4,500,000 from Conrad National Bank, giving a 6% mortgage note.
	13.	Issued 20,000 shares of Preferred stock, receiving $130 per share in cash.
	26.	Issued 27,400 shares of Common stock in exchange for land and a building, according to the plan.

No other expansion-related transactions occurred during March.

Instructions:

Illustrate the effects on the accounts and financial statements of the Mar. 8. transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

Statement of Cash Flows	Balance Sheet
Assets	=	Liabilities	+	Stockholders' Equity
	=		+
Mar. 8.	fill in the blank 4		fill in the blank 5		fill in the blank 6
Statement of Cash Flows		*Income Statement*
	fill in the blank 8			fill in the blank 10

Illustrate the effects on the accounts and financial statements of the Mar. 13 transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

Statement of Cash Flows	Balance Sheet
Assets	=	Liabilities	+	Stockholders' Equity
	=		+		+
Mar. 13.	fill in the blank 15		fill in the blank 16		fill in the blank 17	fill in the blank 18
Statement of Cash Flows		*Income Statement*
	fill in the blank 20			fill in the blank 22

Illustrate the effects on the accounts and financial statements of the Mar. 26 transaction. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

Statement of Cash Flows	Balance Sheet
Assets	=	Liabilities	+	Stockholders' Equity
	+		=		+	+
Mar. 26.	fill in the blank 28		fill in the blank 29		fill in the blank 30	fill in the blank 31	fill in the blank 32
Statement of Cash Flows		*Income Statement*
	fill in the blank 34			fill in the blank 36

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 6 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.