FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Assume one year later (2019) the company A&B Company Ltd has been formed and the owners are desirous of companying several financial transactions and possible outcomes to assist in guiding their decision-making process
The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration:
- A&B Company Ltd purchased a piece of land from the original owner. In payment for the land, A&B Company Ltd issues $400,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of 1,480,000.
- The company sold 110,000 shares of common stock with $1 par value.
- Issued 24,000 shares of $14 par value preferred stock. Shares were issued at par.
- Earned net income of $1,000,000
- Dividend declared and paid - $0.15 per share on common stock
- Dividend declared and paid - $5 per
share on preferred stock
Using the information above and as guided:
1. Prepare the
2. Prepare the owner’s equity section of the
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