The Sugarland Company reported the following on its balance sheet at December 31, 2012: Common Stock, $2.25

Question:

The Sugarland Company reported the following on its at December 31, 2012:
Common Stock, $2.25 par value, 550,000 shares authorized,
400,000 shares issued and outstanding...... $ 900,000
Paid-in Capital in Excess of Par......... 395,500
Retained Earnings............. 2,400,000

1. Assume Sugarland Company issued all of its stock during 2012 in one transaction. Journalize the company’s issuance of the stock for cash.
2. Was Sugarland Company’s main source of stockholders’ equity paid-in capital or profitable operations? How can you tell?

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...