Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $ 1 par
Question:
a. Issued 6,000 shares of common stock for cash at $ 20 per share.
b. Issued 2,000 shares of common stock for cash at $ 23 per share.
Required:
1. Show the effects of each transaction on the accounting equation.
2. Give the journal entry required for each of these transactions.
3. Prepare the stockholders’ equity section as it should be reported on the year-end balance sheet. At year-end, the accounts reflected a profit of $ 100.
4. Incentive Corporation has $ 30,000 in the company’s bank account. What is the maximum amount of cash dividends the company can declare and distribute? Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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