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, 2021. In addition, J&K Paint Shop 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. 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. Issued 60%shares of class A common stock. Stock has par value of $48.00 per share and was issued at $105.00 per share. (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space). Issued 60%shares of no-par class B stock. Issue Price $98.00 Issued 20%shares of preferred stock at par value. Par Value is $168.00 Exchanged 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 $10,000,00.00. Earned Net income $1,450,000.00. Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders. Using the info above and as a guide: Prepare the company’s Stockholders equity section of the balance sheet at December 31, 2021.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.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 29P

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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, 2021. In addition, J&K Paint Shop 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. 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.

Issued 60%shares of class A common stock. Stock has par value of $48.00 per share and was issued at $105.00 per share. (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space).
Issued 60%shares of no-par class B stock. Issue Price $98.00
Issued 20%shares of preferred stock at par value. Par Value is $168.00
Exchanged 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 $10,000,00.00.
Earned Net income $1,450,000.00.
Declared interim dividends for preferred shareholders as well as $.80 per share to common stockholders.

Using the info above and as a guide:

Prepare the company’s Stockholders equity section of the balance sheet at December 31, 2021.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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