In January 2014, Vanowski Corporation was organized and authorized to issue 2,000,000 shares of no-par common stock and 50,000 shares of 5 percent, $50 par value, noncumulative preferred stock. The stock-related transactions for the first years operations follow. Required 1.
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Required
1. For each of these transactions, indicate the account numbers and dollar amounts (as shown in the example) for the account(s) debited and credited, using the account numbers that follow.
110 Cash
120 Land
121 Building
220 Dividends Payable
305 Preferred Stock
310 Common Stock
312 Additional Paid-in Capital
313 Paid-in Capital, Treasury Stock
340 Retained Earnings
341 Dividends
350 Treasury Stock, Common
510 Start-up and Organization Costs
2. Why is the stockholders€™ equity section of the balance sheet an important consideration in analyzing the performance of acompany?
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...
Account Debited Credited Account Dllar Account Dollar Number Aount Number Amount Jan 19 Sold 15,000 shares of com mon stock for $31,500. State law requires a minimum of S1 stated value per share. Issued 5,000 shares of com mon stock to attorneys and accountants for services valued at S11,000 and provided dur ing the organization of the corporation 310 312 $15,000 $16,500 110 $31,500 21 Feb. 7 Issued 30,000 shares of com mon stock for a building that had an appraised value of $78,000 Mar. 22 Pchased 10,000 shares of its common stock at $3 per share. July 5 Issued 5,000 shares of com mon stock to employees under a stock option plan that allows any employee to buy shares at the current market price, which is now $3 per share Aug. Sold 2,500 shares of treasury stock for S4 per share. Sept.Declared a cash dividend of $0.15 per common share to be paid on September 25 to stockholders of record on September 15 Date of record for cash dividends. Paid cash dividends to stockholders of record on September 15 Issued 4,000 shares of com mon stock for a piece of land. The stock was selling for S3 per share, and the land had a fair market value of $12,000 Issued 2,200 shares of pre ferred stock for S50 per share Sept. 15 25 Oct. 30 Dec. 15
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Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
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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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