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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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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