The partners who own Ameen Canoes Co. wished to avoid the unlimited personal liability of the partnership


The partners who own Ameen Canoes Co. wished to avoid the unlimited personal liability of the partnership form of business, so they incorporated as Ameen Canoes, Inc. The charter from the state of Mississippi authorizes the corporation to issue 150,000 shares of $20 par common stock. In its first month, Ameen Canoes completed the following transactions
Jan 6 Issued 100 shares of common stock to the promoter for assistance with issuance of common stock. The promotional fee was $3,000. Debit Organization Expense.
9 Issued 7,000 shares of common stock to Al Ameen and 11,000 shares to Arnold Ameen in return for cash equal to the stock’s market value of $30 per share. The Ameens were partners in Ameen Canoes Co.
26 Issued 900 shares of common stock for $30 cash per share.

1. Record the transactions in the journal.
2. Prepare the stockholders’ equity section of Ameen Canoes, Inc., balance sheet at January 31. The ending balance of Retained Earnings is $80,000.

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...
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...
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...
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Financial accounting

ISBN: 978-0132751124

9th edition

Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom

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