Question

Alison Weld, owner of Wicked Wild Company, decides to start a new company that will be operated as a corporation, North Pole Incorporated (NPI). This company will sell outdoor clothing and equipment North Pole Incorporated had the following select transactions in 2021: (Click the icon to view the transactions.) Read the requirements Requirement 1. Joumalize the transactions. (Record debits first, then credits. Select the explanation on the last line of the journal entry table) Jan. 1: Issued 20,000 shares of $1 par value common stock for a total of $140.000 Date Accounts and Explanation Debit Credit Jan. 1 i Requirements Jan 10: Issued 10,000 shares of 2%, $10 par value preferred stock in exchange for land with a market value of $300,000 1. Journalize the transactions 2. Calculate the balance in Retained Earnings on December 31, 2021. Assume net income for the year was $427,000. 3. Prepare the stockholders' equity section of the balance sheet as of December 31, 2021 Date Accounts and Explanation Debit Credit Jan. 10 Print Done Choose from any list or enter any number in the input fields and then continue to the next question, Type here to search D e 9 M E S ALIENWARE

Answer 1

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Wicked Wild Company
Answer to requirement 1
Date	Account	Debit $	Credit $
1-Jan	Bank	140,000.00
	Common Stock		20,000.00	This is 20,000 shares* $ 1.
	Additional paid in capital- Common Stock		120,000.00	This is $ 140,000- $ 20,000.
10-Jan	Land	300,000.00
	2% Preferred Stock		100,000.00	This is 10,000 shares* $ 10.
	Additional paid in capital- Preferred Stock		200,000.00	This is $ 300,000- $ 100,000.
15-Dec	Retained Earnings	12,000.00
	Dividend Payable- Preferred Stock		2,000.00	This is 2 % of $ 100,000.
	Dividend Payable- Common Stock		10,000.00	This is $ 12,000- $ 2,000.
20-Dec	Retained Earnings	3,200.00		This is 2 % of 20,000 common shares= 400 shares. 400 shares* market value $ 8= $ 3,200.
	Stock Dividend Payable- Common Stock		3,200.00
31-Dec	Dividend Payable- Preferred Stock	2,000.00
	Dividend Payable- Common Stock	10,000.00
	Bank		12,000.00
31-Dec	Stock Dividend Payable- Common Stock	3,200.00
	Common Stock		400.00	This is 400 shares* $ 1
	Additional paid in capital- Common Stock		2,800.00	This is $ 3,200- $ 400.

Answer to requirement 2
Retained Earnings December 31, 2021:		Amount $
Retained Earnings Jan 1, 2021		-
Add: Net Income		427,000.00
Less: Cash Dividend		12,000.00
Less: Stock Dividend		3,200.00
Retained Earnings December 31, 2021:		411,800.00

Answer to requirement 3
Stockholder's Equity
Paid-In Capital:	Amount $	Amount $
Preferred 2% Stock, $10 par
-10,000 shares issued	100,000.00
Paid-In Capital in Excess of Par-Preferred Stock	200,000.00	300,000.00
Common Stock, $1 par
-20,400 shares issued	20,400.00
Paid-In Capital in Excess of Par-Common Stock	122,800.00	143,200.00
Total Paid-In Capital		443,200.00
Retained Earnings		411,800.00
Total Stockholder's Equity		855,000.00