Issuance of shares; noncash consideration
• LO18–4
During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 8 million common shares, $1 par per share, and 1 million
Required:
Prepare the appropriate
Feb. 12 | Sold 2 million common shares, for $9 per share. |
13 | Issued 40,000 common shares to attorneys in exchange for legal services. |
13 | Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000. |
Nov. 15 | Issued 380,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000. |
Trending nowThis is a popular solution!
Chapter 18 Solutions
Gen Combo Looseleaf Intermediate Accounting; Connect Access Card
Additional Business Textbook Solutions
Fundamentals of Financial Accounting
Managerial Accounting (4th Edition)
Financial Accounting, Student Value Edition (5th Edition)
Fundamentals of Cost Accounting
Construction Accounting And Financial Management (4th Edition)
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
- Question 3:.. CL03 A. The following selected transactions pertain to L. Lewis Corporation: Jan. 3 Issued 100,000 shares, $10 par value, common stock for $25 per share. Feb. 10 Issued 6,000 shares, $10 par value, common stock in exchange for special purpose equipment. L. Lewis Corporation's common stock has been actively traded on the stock exchange at $30 per share. Date Account title Debit Creditarrow_forwardn Problem 21-2 (ACP) the following issuance of equity shares: At the beginning of current year, Alegro Company reported 200,000 shares at P20 250,000 shares at P25 shares was a. The share has a P15 par value. b. The share is no par with stated value of P20. per share. at P20, and these shares were reissued at year-end at P25 During the current year, the entity reacquired 50,000 shares Required: assuming: Prepare journal entries to record the foregoing transactions 745 4,000,000 6,250,000arrow_forwarduestion 8 The following transactions have occurred for Comeback Kid Corporation (COC): 1) Jan. 1/21: The newly formed company (COC) is granted a charter authorizing the issuance of 200,000 preferred shares and an unlimited number of common shares. 2) Jan.30/21: The three company founders are issued 4,000 shares EACH in return for land and buildings valued at $300,000 and $75,000 respectively. 3) Feb.17/21: Sold 18,000 preferred shares for cash of $120 per share. 4) June 15/21: Repurchased 3,500 of the outstanding preferred shares for cash of $110 per share and then subsequently cancelled these shares. 5) Aug.4/21: Repurchased 1,000 of the outstanding common shares for cash of $35 and then subsequently cancelled these shares. 6) Oct. 15/21: Paid a $2 per share dividend on all outstanding common shares as of at Sept.30/21. Required: a) Prepare the journal entries to record the above transactions. Note that no other transactions impacting the capital share accounts have occurred. Prepare…arrow_forward
- PROBLEM 2 The KYOTO COMPANY is authorized to issue 600,000 shares P10 par value ordinary share capital. Kyoto accounting year ends on December 31. The following transactions occurred in 2021, the company's first year of operations. a. Issued 20,000 shares at P20 per share; received cash b. Issued 2,500 shares to attorney's for services in securing the corporate charter and for preliminary legal costs of organizing the corporation. The fair value of the services was P85,000 c. Issued 300 shares, valued objectively at P15,000 to the employees instead of paying them cash wages. d. Issued 325,000 shares in exchange for building valued at P3,000,000 and land valued at P4,000,000 (The building was originally acquired by the investor for P2,500,000 and has P1,000,000 of accumulated depreciation; the land was originally acquired for P1,500,000) 1. What is the ordinary share capital balance on December 31, 2021? a. P3,453,000 b. P3,478,000 c. P3,490,000 d. P4,278,000 2. The amount of share…arrow_forwardProblem no. 1 ABC Corporation has the following transactions throughout the year of 2020: Jan ABC Corporation received its certificate of incorporation from Securities and Exchange Commission. From its submitted Articles of Incorporation, the corporation has a total of authorized share capital of PI0,000,000.00 divided into 1,000,000 ordinary shares with par value of P10.00. Out of the total authorized share capital, 30% has been fully paid and issued at P11.00 per share to incorporators. The company incurred P120,000 directly related to the issuance of shares. Feb 2 Mr. Z, an investor, subscribed 20,000 shares at a subscription price of P15.00. ABC has collected 20% of the total subscription price and remaining balance payable within 10 days. 5 ABC issued 140,000 shares at P17.00 per share. ABC issued 40,000 shares in exchange for equipment. The fair value of the shares is P11.00 and the fair value of the equipment is P480,000. 28 ABC issued 30,000 shares for payment of legal…arrow_forwardQuestion 37 BFAR Corp. received a charter authorizing 120,000 ordinary shares at P15 par value per share. During the first year of operations, 22,000 shares were issued at P25 per share and 600 shares were issued in exchange for equipment with a fair value of P22,600. How much is the balance of the Share Premium account?arrow_forward
- Problem no. 1 ABC Corporation has the following transactions throughout the year of 2020: Jan ABC Corporation received its certificate of incorporation from Securities and Exchange Commission. From its submitted Articles of Incorporation, the corporation has a total of authorized share capital of P10,000,000.00 divided into 1,000,000 ordinary shares with par value of P10.00. Out of the total authorized share capital, 30% has been fully paid and issued at P11.00 per share to incorporators. The company incurred P120,000 directly related to the issuance of shares. Feb 1 Mr. Z, an investor, subscribed 20,000 shares at a subscription price of P15.00. ABC has collected 20% of the total subscription price and remaining balance payable within 10 days. 5 ABC issued 140,000 shares at P17.00 per share. ABC issued 40,000 shares in exchange for equipment. The fair value of the shares is P11.00 and the fair value of the equipment is P480,000. 28 9 ABC issued 30,000 shares for payment of legal…arrow_forward15 Starr Corporation was organized on January 1, 20X1, with an authorization of 400,000 shares of common stock with a par value of $6 per share. During 20X1, the corporation had the following capital transactions: January 5 July 28 December 31 issued 225,000 shares @ $10 per share purchased 30,000 shares @ $11 per share sold the 30,000 shares held in treasury @ $18 per share Starr used the cost method to record the purchase and reissuance of the treasury shares. What is the total amount of additional paid-in capital as of December 31, 20X1? a. $-0-. b. $690,000. $900.000. d. $1,110,000.arrow_forwardProblem 6: Treasury Shares year 20x1: Valientes Corporation reported the shareholders. Equity at the beginning of the Ordinary share, P10 par, outstanding 225,000 shares Share Premium Retained Earnings 2,250,000 1,500,000 2,000,000 During the year, the entity had the following treasury shares transactions: Acquired 10,000 treasury shares for P500,000. Sold 5,000 treasury shares at P60 per share - Sold 2,000 treasury shares at P45 per share. Required: a. Prepare the journal entries b. Prepare the shareholders' equity at the end of the yeararrow_forward
- Problem #9 Entries for Share Dividends E Tan Med-Care Inc. is a health insurance corporation. The following account balances appear on the statement of financial position of E. Tan Med-Care Inc.: Ordinary Shares (50,000 shares authorized), P10 par, P400,000; Share Premium-Ordinary, P42,500, and Retained Earnings, P299,500. The board of directors declared a 4% share dividend when the market price of the stock was P15 a share. Required: 1. Journalize the entries to record a. the declaration of the dividend. b. the issuance of the shares. 2. Determine the following amounts before the share dividend was declared: a. total share capital b. total retained earnings c. total shareholders' equity 3. Determine the following amounts after the share dividend was declared: a. total share capital b. total retained earnings c. total shareholders' equityarrow_forwardExercise 19-24 (Algo) New shares; contingently issuable shares [LO19-6,19-12] During 2024, its first year of operations, Kevin Berry Industries entered into the following transactions relating to shareholders' equity. The corporation was authorized to issue 100 million common shares, $1 par per share. January 2 Issued 55 million common shares for cash. January 2 Entered an agreement with the company president to issue up to 2 million additional shares of common stock in 2025 based on the earnings of Berry in 2025. If net income exceeds $140 million, the president will receive 1 million shares; 2 million shares if net income exceeds $150 million. March 31 Issued 4 million shares in exchange for plant facilities. Net income for 2024 was $148 million. Required: Compute basic and diluted earnings per share for the year ended December 31, 2024. Note: Do not round intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Basic Diluted Numerator + +…arrow_forwardLO 14.2 Fortuna Company is authorized to issue 1,000,000 shares of $1 par value common stock. In its first year, the company has the following transactions: Jan. 31 Issued 40,000 shares at $10 share Jun. 10 Issued 100,000 shares in exchange for land with a clearly determined value of $850,000 Aug. 3 Purchased 10,000 shares of treasury stock at $9 per share Calculate how many shares of stock are outstanding at August 3.arrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning