Sheffield Corporation is authorized to issue 23,000 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders’ equity balances. Preferred Stock (11,500 shares) $575,000 Paid-in Capital in Excess of Par—Preferred Stock 67,000 Common Stock (62,000 shares) 310,000 Paid-in Capital in Excess of Par—Common Stock 650,000 Retained Earnings 280,000 During 2020, the following transactions occurred. Feb. 1 Issued 2,000 shares of preferred stock for land having a fair value of $129,000. Mar. 1 Issued 1,200 shares of preferred stock for cash at $65 per share. July 1 Issued 17,000 shares of common stock for cash at $7 per share. Sept. 1 Issued 550 shares of preferred stock for a patent. The asking price of the patent was $32,000. Market price for the preferred stock was $70 and the fair value for the patent was indeterminable. Dec. 1 Issued 7,500 shares of common stock for cash at $7.50 per share. Dec. 31 Net income for the year was $260,000. No dividends were declared. 1. Journalize the transactions and the closing entry for net income

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...

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Sheffield Corporation is authorized to issue 23,000 shares of $50 par value, 10% preferred stock and 125,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders’ equity balances.

Preferred Stock (11,500 shares)		$575,000
Paid-in Capital in Excess of Par—Preferred Stock		67,000
Common Stock (62,000 shares)		310,000
Paid-in Capital in Excess of Par—Common Stock		650,000
Retained Earnings		280,000

During 2020, the following transactions occurred.

Feb.	1	Issued 2,000 shares of preferred stock for land having a fair value of $129,000.
Mar.	1	Issued 1,200 shares of preferred stock for cash at $65 per share.
July	1	Issued 17,000 shares of common stock for cash at $7 per share.
Sept.	1	Issued 550 shares of preferred stock for a patent. The asking price of the patent was $32,000. Market price for the preferred stock was $70 and the fair value for the patent was indeterminable.
Dec.	1	Issued 7,500 shares of common stock for cash at $7.50 per share.
Dec.	31	Net income for the year was $260,000. No dividends were declared.

1. Journalize the transactions and the closing entry for net income

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