Blitz Power Tongs Inc. received a charter that authorized it to issue an unlimited number of common
Question:
Blitz Power Tongs Inc. received a charter that authorized it to issue an unlimited number of common shares. The following transactions were completed during 2016:
Jan. 5 Issued 10 common shares for a total of $150 cash.
12 Exchanged 50 shares of common shares for assets listed at
their fair values: machinery — $100; building — $100;
land — $50.
Feb. 28 Declared a 10% share dividend. Market value is $7 per
share. Net income to date is $60.
Mar. 15 Issued the share dividend.
Dec. 31 Closed the 2016 net income of $200 from the Income
Summary account in the general ledger to the Retained
Earnings account.
Dec. 31 Declared a $1 per share cash dividend.
Required
1. Prepare journal entries for the 2016 transactions, including closing entries.
2. Prepare the shareholders’ equity section of the balance sheet at
a. January 31, 2016
b. February 28, 2016
c. December 31, 2016.
Balance SheetBalance 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...
Step by Step Answer:
Accounting Introduction To Financial Accounting
ISBN: 9781517089719
1st Edition
Authors: Henry Dauderis, David Annand