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38) Prepare a journal entry for each of the following transactions. a) Struthers Corporation sells 100,000 common shares for $4.50 per share. b) Struthers Corporation sells 6,000 shares of $3, cumulative preferred shares for $70 per share. c) Received equipment with a market value of $60,000, and issued 12,400 common shares in exchange. d) Struthers Corporation reports a net income for the current year of $241,000. Prepare the entry to close the income summary account. Date
Answer: Date a) b) d) e)
Accounts
Accounts Cash Common Shares Cash Preferred Shares Equipment Common Shares Income Summary Retained Earnings
Debit
Credit
Debit 450,000
Credit 450,000
420,000 420,000 60,000 60,000 241,000 241,000
Diff: 2 Type: SA Learning Outcome: A-14 Apply basic accounting methods to record and evaluate share transactions, cash and stock dividends, and stock splits Skill: Application Objective: 13-2 Record the issuance of shares and prepare the shareholders' equity section of a corporation's balance sheet
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