Cashman Nursery, with an authorization of 25,000 shares of preferred stock and 300,000 shares of common stock,
Question:
Cashman Nursery, with an authorization of 25,000 shares of preferred stock and 300,000 shares of common stock, completed several transactions involving its stock on July 30, the first day of operations. The trial balance at the close of the day follows:
All shares within each class of stock were sold at the same price. The preferred stock was issued in exchange for the land and buildings.Journalize the two entries to record the transactions summarized in the trialbalance.
Cash 475,000 125,000 200,000 Land .... Buildings Preferred 2% Stock, $100 par Paid-In Capital in Excess of Par-Preferred Stock Common Stock, $40 par Paid-In Capital in Excess of Par-Common Stock 250,000 300,000 175,000 800,000 800,000
Step by Step Answer:
Date Land Buildings Cash Particulars Prefe...View the full answer
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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