Question

Mendoza Corp was organized on JAN 1, 2017.

It is authorized to issue 20,000 shares of 6%, $40 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share.

These stock transactions were completed during the first year. Jan 10 Issued 100,000 shares of common stock for cash at $3 per share. ar. 1 Issued 10,000 shares of preferred stock for cash at $55 per share.

Apr. 1 Issued 25,000 shares of common stock for land. The asking price of the land was $90,000. The company’s estimate of fair value of the land was $75,000.

May 1 Issued 75,000 shares of common stock for cash at $4 per share.

Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill for $50,000 for services performed in helping the company organize.

Sept. 1 Issued 5,000 shares of common stock for cash at $6 per share.

Nov. 1 Issued 2,000 shares of preferred stock for cash at $60 per share.

INSTRUCTIONS: Post to the stockholders’ equity accounts.

Debit Credit Balance Preferred Stock | Date Explanation Mar 01 Nov 01 Balance Paid-In Capital in Excess of Par - Preferred Stock Date Explanation Debit Credit Mar 01 Nov 01 | Debit Credit Balance Common Stock Date Explanation Jan 10 Apr 01 May 01 Aug 01 Sept 01 Balance Paid-In Capital in Excess of Par - Common Stock Date Explanation Debit Credit Jan 10 Apr 01 May 01 Aug 01 Sept 01

Answer 1

A C F 2 Preferred stock 3 Explanation Debit Credit Balance 4 Date 400,000 400,0o0 80,000 480,000 Mar. 1 5 Nov. 1 6 7 Paid in capital in excess of par-Preferred stock Explanation Debit Credit Balance Date 150,000 150,0o0 Mar. 1 10 Nov. 1 11 40,000 190,000 12 Common stock 13 Explanation Debit Credit Balance 14 Date 200,000 200,0o0 50,000 250,000 150,000 400,0o0 20,000 420,000 10,000 430,000 Jan. 10 15 Apr. 1 16 May. 1 Aug. 1 Sept. 1 17 18 19 20 Paid in capital in excess of par-Common stock Explanation 21 Debit Credit Balance 22 Date 100,000 100,0o0 25,000 125,000 150,000 275,0o0 30,000 305,000 Jan. 10 23 Apr. 1 May. 1 Aug. 1 Sept. 1 24 25 26 27 20,000 325,000 ш co LO

Working note:

C D Е F 2 Preferred stock Explanation Debit Credit Balance 4 Date - 10000*40 Mar. 1 -E5 EF5+E6 5 Nov. 1 -2000*40 6 7 Paid in capital in excess of par-Preferred stock 8 Explanation Debit Credit Balance Date = 10000*(55-40) - 2000*(60-40) Mar. 1 -E10 10 -F10+E11 11 Nov. 1 12 13 Common stock Explanation Debit Credit Balance 14 Date Jan. 10 100000*2 -E15 15 -25000 2 Apr. 1 May. 1 Aug. 1 Sept. 1 EF15+E16 16 - 75000*2 - 10000*2 -F16+E17 17 18 EF17+E18 -F18+E19 19 -5000*2 20 Paid in capital in excess of par-Common stock Explanation Debit 21 Credit Balance 22 Date - 100000*(3-2) Jan. 10 -E23 23 = 75000-(25000*2)F23+E24 =75000*(4-2) -50000-(10000*2)F25+E26 -5000*(6-2) Apr. 1 May. 1 Aug. 1 Sept. 1 24 -F24+E25 25 26 -F26+E27 27 28 CO