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(Solution) - Transactions to incorporate and run a business The following ev

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Transactions to incorporate and run a business. The following events relate to shareholders? equity transactions of Wilson Supply Company during the first year of its existence. Present journal entries for each of the transactions.
a. January 2: The firm files articles of incorporation with the State Corporation Commission. The authorized capital stock consists of 5,000 shares of $100 par value preferred stock that offers an 8% annual dividend, and 50,000 shares of no-par common stock. The original incorporators acquire 300 share of common stock at $30 per share; the firm collects cash for the shares. It assigns a stated value of $30 per share to the common stock.
b. January 6: The firm issues 2,000 shares of common stock for cash at $30 per share.
c. January 8: The firm issues 4,000 shares of preferred stock at par.
d. January 9: The firm issues certificates for the shares of preferred stock.
e. January 12: The firm acquires the tangible assets and goodwill of Richardson Supply, a partnership, in exchange for 1,000 shares of preferred stock and 12,000 shares of common stock. It values the tangible assets acquired as follows: inventories. $50,000; land, $80,000; buildings, $210,000; and equipment, $120,000.
f. July 3: The directors declare the semiannual dividend on preferred stock outstanding, payable July 25, to shareholders of record on July 12.
g. July 5: The firm operated profitably for the first six months, and it decides to expand. The company issues 25,000 shares of common stock for cash at $33 per share.
h. July 25: It pays the dividend on preferred stock declared on July 3.
i. October 2: The directors declare a dividend of $1 per share on the common stock, payable October 25, to shareholders of record on October 12.
j. October 25: The firm pays the dividend on common stock declared on October 2.

 







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