Comprehensive The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2018, is as follows:
The following events occurred during 2019:
Required:
1.
Prepare the journal entries for the given transactions.
Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.
Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend.
Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.
Prepare the journal entries for the given transactions:
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) |
2019 | Â | Â | Â | Â |
January 5 | Cash | Â | 80,000 | Â |
 |     Common Stock |  |  | 50,000 |
 |     Additional Paid-in Capital on Common Stock |  |  | 30,000 |
 | (To record issuance of common stock) |  |  |  |
 |  |  |  |  |
January 5 | Cash | Â | 1,090,000 | Â |
 |     Preferred Stock |
2.
Calculate the number of common shares authorized, issued, and outstanding as December 31, 2019.
3.
Calculate Corporation S’s legal capital as on December 31, 2019.
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