BiBa Manufacturings charter authorized the company to issue an unlimited number of common shares and 750,000 preferred

Question:

BiBa Manufacturing’s charter authorized the company to issue an unlimited number of common shares and 750,000 preferred shares. The following transactions occurred during BiBa’s first year of business:

Jan 10 Issued 5,000 common shares to the firm’s promoters for the work done to set up the corporation. This work has an estimated value of $60,000.

May 21 40,000 shares were issued for cash of $15 per share.

July 25 15,000 preferred shares were issued for cash totaling $225,000.

Oct 1 50,000 common shares in total were issued for land, buildings, and equipment with appraised values of $250,000, $380,000, and $170,000 respectively.

Requirements

1. Prepare journal entries for all the transactions.

2. Prepare the shareholders’ equity section of the balance sheet at December 31, 2014

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Financial Accounting

ISBN: 978-0132889711

1st Canadian Edition

Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper

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