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In 2020, Joanna and some of her friends invested money to start a company named LADIEZ Corporation. The following transactions occurred during 2020. Jan The corporate charter authorized 77,000 shares of 4%, cumulative 1 preferred shares and unlimited no-par value common shares. Jan Issued 243,000 common shares at $11 per share to Elizabeth and other investors. Issued another 510 common shares to Elizabeth in exchange for her Jan services in organizing the corporation. The shareholders agreed that 7 the services were worth $10,200. Jan Issued 3,600 preferred shares for $360,000. 12 Issued 10,000 common shares in exchange for equipment. The fair Jan market value of the equipment could not be readily determined, but the 14 market price of the common shares on this date was $17 per share. Nov The first annual dividend on preferred shares declared. Dec Paid the dividends declared on preferred shares. 20 Dec Estimated income tax expense of $43,000. 31 LADIEZ Corporation generated a $127,000 (after income tax) during the year. The company uses the retained earnings account to record dividends. a) Prepare the journal entries to record the above transactions in 2020. Do not enter dollar signs or commas in the input boxes. Date Account Title and Explanation Debit Credit Jan 6 Issued common shares for cash Jan 7 Issued common shares for services Jan 12 Issue of preferred shares for cash Jan 14 Issued common shares for equipment Nov 15 Dividend declared on preferred shares Dec 20 Recording payment of dividend Dec 31 To record tax expense and liability

In 2020, Joanna and some of her friends invested money to start a company named LADIEZ Corporation. The following transactions occurred during 2020. Jan The corporate charter authorized 77,000 shares of 4%, cumulative 1 preferred shares and unlimited no-par value common shares. Jan Issued 243,000 common shares at $11 per share to Elizabeth and other investors. Issued another 510 common shares to Elizabeth in exchange for her Jan services in organizing the corporation. The shareholders agreed that 7 the services were worth $10,200. Jan Issued 3,600 preferred shares for $360,000. 12 Issued 10,000 common shares in exchange for equipment. The fair Jan market value of the equipment could not be readily determined, but the 14 market price of the common shares on this date was $17 per share. Nov The first annual dividend on preferred shares declared. Dec Paid the dividends declared on preferred shares. 20 Dec Estimated income tax expense of $43,000. 31 LADIEZ Corporation generated a $127,000 (after income tax) during the year. The company uses the retained earnings account to record dividends. a) Prepare the journal entries to record the above transactions in 2020. Do not enter dollar signs or commas in the input boxes. Date Account Title and Explanation Debit Credit Jan 6 Issued common shares for cash Jan 7 Issued common shares for services Jan 12 Issue of preferred shares for cash Jan 14 Issued common shares for equipment Nov 15 Dividend declared on preferred shares Dec 20 Recording payment of dividend Dec 31 To record tax expense and liability

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 2020, Joanna and some of her friends invested money to start a company named LADIEZ Corporation. The following transactions occurred during 2020. Jan The corporate charter authorized 77,000 shares of 4%, cumulative 1 preferred shares and unlimited no-par value common shares. Jan Issued 243,000 common shares at $11 per share to Elizabeth and other investors. Issued another 510 common shares to Elizabeth in exchange for her Jan services in organizing the corporation. The shareholders agreed that 7 the services were worth $10,200. Jan Issued 3,600 preferred shares for $360,000. 12 Issued 10,000 common shares in exchange for equipment. The fair Jan market value of the equipment could not be readily determined, but the 14 market price of the common shares on this date was $17 per share. Nov The first annual dividend on preferred shares declared. 15 Dec Paid the dividends declared on preferred shares. 20 Dec Estimated income tax expense of $43,000. 31 LADIEZ Corporation generated a $127,000 (after income tax) during the year. The company uses the retained earnings account to record dividends. a) Prepare the journal entries to record the above transactions in 2020. Do not enter dollar signs or commas in the input boxes. Date Account Title and Explanation Debit Credit Jan 6 Issued common shares for cash Jan 7 Issued common shares for services Jan 12 Issue of preferred shares for cash Jan 14 Issued common shares for equipment Nov 15 Dividend declared on preferred shares Dec 20 Recording payment of dividend Dec 31 To record tax expense and liability
Transcribed Image Text:In 2020, Joanna and some of her friends invested money to start a company named LADIEZ Corporation. The following transactions occurred during 2020. Jan The corporate charter authorized 77,000 shares of 4%, cumulative 1 preferred shares and unlimited no-par value common shares. Jan Issued 243,000 common shares at $11 per share to Elizabeth and other investors. Issued another 510 common shares to Elizabeth in exchange for her Jan services in organizing the corporation. The shareholders agreed that 7 the services were worth $10,200. Jan Issued 3,600 preferred shares for $360,000. 12 Issued 10,000 common shares in exchange for equipment. The fair Jan market value of the equipment could not be readily determined, but the 14 market price of the common shares on this date was $17 per share. Nov The first annual dividend on preferred shares declared. 15 Dec Paid the dividends declared on preferred shares. 20 Dec Estimated income tax expense of $43,000. 31 LADIEZ Corporation generated a $127,000 (after income tax) during the year. The company uses the retained earnings account to record dividends. a) Prepare the journal entries to record the above transactions in 2020. Do not enter dollar signs or commas in the input boxes. Date Account Title and Explanation Debit Credit Jan 6 Issued common shares for cash Jan 7 Issued common shares for services Jan 12 Issue of preferred shares for cash Jan 14 Issued common shares for equipment Nov 15 Dividend declared on preferred shares Dec 20 Recording payment of dividend Dec 31 To record tax expense and liability
b) Prepare the statement of retained earnings for the year ended December 31, 2020. LADIEZ Corporation Calculation of Retained Earnings For the Year Ended December 31, 2020 Opening Balance Add: Net Income Less: Cash Dividends - Preferred Balance - December 31, 2020 c) Prepare the shareholders' equity section of the balance sheet as at December 31, 2020. LADIEZ Corporation Balance Sheet (Partial) December 31, 2020 Shareholders' Equity Contributed Capital Preferred Shares, 4% cumulative, 77,000 authorized, 3,600 issued and outstanding Common Shares, unlimited authorized, 253,510 issued and outstanding Total Contributed Capital Retained Earnings Total Shareholders' Equity
Transcribed Image Text:b) Prepare the statement of retained earnings for the year ended December 31, 2020. LADIEZ Corporation Calculation of Retained Earnings For the Year Ended December 31, 2020 Opening Balance Add: Net Income Less: Cash Dividends - Preferred Balance - December 31, 2020 c) Prepare the shareholders' equity section of the balance sheet as at December 31, 2020. LADIEZ Corporation Balance Sheet (Partial) December 31, 2020 Shareholders' Equity Contributed Capital Preferred Shares, 4% cumulative, 77,000 authorized, 3,600 issued and outstanding Common Shares, unlimited authorized, 253,510 issued and outstanding Total Contributed Capital Retained Earnings Total Shareholders' Equity
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