(Solution) 13-48 Name: Enter Appropriate Account Titles By Selecting From The Drop-down Lists Provided In The Blue-shaded Cells In Columns D And E, And Enter... | Snapessays.com


(Solution) 13-48 Name: Enter appropriate account titles by selecting from the drop-down lists provided in the blue-shaded cells in columns D and E, and enter...


Lighthouse Company began operations on January 1. Authorized were 25,000 shares of $1 par value common stock and 5,000 shares of 10%, $100 par value convertible preferred stock. The following transactions involving stockholders equity occurred during the first year of operations:Jan. 1 Issued 1,000 shares of common stock to the corporation promoters in exchange for property valued at $23,000 and services valued at $5,000. The property had cost the promoters $18,000 three years before and was carried on the promoters books at $15,000.Feb. 23 Issued 1,500 shares of convertible preferred stock with a par value of $100 per share. Each share can be converted to five shares of common stock. The stock was issued at a price of $120 per share, and the company paid $6,000 to an agent for selling the shares.Mar. 10 Sold 2,500 shares of the common stock for $26 per share. Issue costs were $2,000.Apr. 10 Sold 5,000 shares of common stock under stock subscriptions at $37 per share. No shares are issued until a subscription contract is paid in full. No cash was received.July 14 Exchanged 1,200 shares of common stock and 190 shares of preferred stock for a building with a fair market value of $72,000. The building was originally purchased for $65,000 by the investors and has a book value of $48,000. In addition, 900 shares of common stock were sold for $27,000 in cash.Aug. 3 Received payments in full for half of the stock subscriptions and payments on account on the rest of the subscriptions. Total cash received was $138,000. Shares of stock were issued for the subscriptions paid in full.Dec. 1 Declared a cash dividend of $10 per share on preferred stock, payable on December 31 to stockholders of record on December 15, and a $1.50-per-share cash dividend on common stock, payable on January 5 of the following year to stockholders of record on December 15. (No dividends are paid on unissued subscribed stock.)31 Paid the preferred stock dividend.31 Received notice from holders of stock subscriptions for 1,000 shares that they would not pay further on the subscriptions because the price of the stock had fallen to $19 per share. The amount still due on those contracts was $35,000. Amounts previously paid on the contracts are forfeited according to the agreements.Net income for the first year of operations was $80,000. Assume that revenues and expenses were closed to a temporary account, Income Summary. Use this account to complete the closing process.Instructions:1. Prepare journal entries to record the preceding transactions on Lighthouse books.2. Prepare the Stockholders Equity section of the balance sheet at December 31 for Lighthouse.13-48

 

Name:

 

Enter appropriate account titles by selecting from the drop-down lists provided in the blue-shaded cells in columns D and E,

 

and enter the appropriate amounts in the blue-shaded cells in columns H and J.

 

The word "Wrong" will appear to the left of incorrect entries.

 

General Journal

 

Date

 

Account Title

 

Debit

 

Credit

 

Jan.

 

1

 

Property

 

23,000

 

Organization Expense

 

5,000

 

Common Stock

 

1,000

 

Paid-In Capital in Excess of Par - Common

 

27,000

 

Issued 1,000 shares of $1 par common stock in

 

exchange for property and services rendered.

 

Feb. 23

 

Cash

 

174,000

 

Preferred Stock

 

150,000

 

Paid-In Capital in Excess of Par - Preferred

 

24,000

 

Mar. 10

 

Cash

 

63,000

 

Common Stock

 

2,500

 

Paid-In Capital in Excess of Par - Common

 

60,500

 

Apr. 10

 

Common Stock Subscriptions Receivable

 

185,000

 

Common Stock Subscribed

 

5,000

 

Paid-In Capital in Excess of Par - Common

 

180,000

 

July 14

 

Building

 

72,000

 

Common Stock

 

Wrong

 

1,200

 

Paid-In Capital in Excess of Par - Common

 

Wrong

 

34,800

 

Preferred Stock

 

19,000

 

Paid-In Capital in Excess of Par - Preferred

 

17,000

 

Aug.

 

3

 

Cash

 

138,000

 

Common Stock Subscriptions Receivable

 

138,000

 

Common Stock Subscribed

 

2,500

 

Common Stock

 

2,500

 

Sold 1,500 shares of $100 par preferred stock

 

at $120 per share less $6,000 commission.

 

Sold 2,500 shares of $1 par common stock

 

at $26 per share less issue costs of $2,000.

 

Received subscriptions for 5,000 shares of

 

$1 par common stock at $37 per share.

 

Sold 900 shares of $1 par common stock at

 

$30 per share and exchanged 1,200 shares of

 

$1 par common stock and 190 shares of

 

$100 par preferred stock for a building.

 

Collected cash on subscriptions and issued

 

2,500 shares of $1 par common stock.

 


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This question was answered on: May 23, 2022

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