The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic Bookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. Issued 30% of authorized shares of class A common stock. Stock has par value of $20.00 per share and was issued at $ 28.00 per share. Issued 30% shares of no par class B stock. Issued 50% share of preferred stock at par stock value. Exchange 40% shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00. Earned Net income is $1,500,000. Prepare the company’s Stockholders equity section of the balance sheet at December 31, 2020. The following information must be clearly stated/shown: • information on par or par values for all classes of shares which must be shown separately. • the number of shares authorized and issued where necessary. • the sub total for the total paid in capital. • Retained earnings. • total stockholders’ equity.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 6C

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The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their
decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic
Bookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000
shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below),
5% cumulative preferred stock.

Issued 30% of authorized shares of class A common stock. Stock has par value of $20.00 per share and was issued at $ 28.00 per share.
Issued 30% shares of no par class B stock.
Issued 50% share of preferred stock at par stock value.
Exchange 40% shares of class A common stock for Office Furniture and Equipment with an appraised value of $ 4,000,000.00 and Motor Truck with an appraised value of $10,000,000.00.
Earned Net income is $1,500,000.

Prepare the company’s Stockholders equity section of the balance sheet at December 31, 2020. The following information must be clearly stated/shown:
• information on par or par values for all classes of shares which must be shown separately.
• the number of shares authorized and issued where necessary.
• the sub total for the total paid in capital.
• Retained earnings.
• total stockholders’ equity.

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