Financial Accounting

Incentive Corporation was organized in 2009 to operate a financial consulting business. The charter authorized the following capital stock: common stock, par value $4 per share. 12,000 shares. During the first year, the following selected transactions were completed:

a - Issued 6,000 shares of common stock for cash at $20 per share.
b - Issued 2,000 shares of common stock for cash at $23 per share.

Required:
1 - show the effects of each transaction on the accounting equation.
2 - Give the journal entry required for each of these transactions.
3 - Prepare the stickholders' equity section as it should be reported on the 2009 year-end balance sheet. At year-end, the accounts reflected a profit of $100.
4 - Incentive Corporation has $30,000 in the company's bank account. Should the company declare cash dividends at this time? Explain.

I AM LOST. Can someone please instruct me on how to go about solving this question?

  1. 👍 0
  2. 👎 0
  3. 👁 234
  1. 1) Both assets and SE go up as cash goes to the company and more shares are bought.
    2)
    Cash $120,000
    Stocks issued on par $24,000
    Gain on c/s $96,000

    1. 👍 0
    2. 👎 0
  2. , how much manufacturing overhead was allocated to production? Archangel Manufacturing has just finished the year 2012. They created a predetermined manufacturing overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. Below are various data:


    Total manufacturing overhead estimated at the beginning of the year: $140,000
    Total direct labor costs estimated at the beginning of the year: $350,000
    Total direct labor hours estimated at the beginning of the year: 12,000 direct labor hours
    Actual manufacturing overhead costs for the year: $159,000
    Actual direct labor costs for the year: $362,000
    Actual direct labor hours for the year: 12,400 direct labor hours

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions

  1. check my work

    1. Which of the following events happened last? (1 point) the Stamp Act the Intolerable Acts the establishment of the first British colony in the New World the Writs of Assista 2. What is a legitimate government? (1 point) one in

    asked by kate on August 19, 2016
  2. Exam: 986109RR - CHOOSING YOUR BUSINESS

    1. The servers at Gerry Frasier's busy ice cream shop decided that putting more ice cream in the sundaes and cones would bring back more customers. After three months, Gerry was surprised to discover that his profit had A.

    asked by Anonymous on March 7, 2013
  3. davenport

    Chapter 6 Problem 14 -- Avon Products Using the financial statements provided below and any other information you find relevant, answer the following questions: a. What was the book value of Avon’s shareholders’ equity from

    asked by lisa on April 7, 2012
  4. Federal Tax II

    Perry organized Cardinal Corporation 10 years ago by contributing property worth $2 million, basis of $450,000 for 2,500 shares of stock in Cardinal, representing 100% of the stock in the corporation. Perry later gave each of his

    asked by Angela on November 7, 2007
  5. Economics

    Say you are the manager of a perfectly competitive firm selling a product. Your business is making a loss because total revenue is less than total costs. What would you do--shut down or continue to operate? Use hypothetical

    asked by Michelle on November 9, 2011
  1. accounting

    The monetary contributions that the owners of IBM pay for shares of the company's stock are ____ resources for IBM. a. material b. financial c. human d. informational e. manufacturing Patents and copyrights confer value on a firm

    asked by Steven on October 29, 2012
  2. accounting

    The following financial data were taken from the annual financial statements of Smith corporation: 2007 2008 2009 Current assets $450,000 $400,000 $500,000 Current liabilities $390,000 $300,000 $340,000 Sales $1,450,000 $1,500,000

    asked by yousef on June 3, 2014
  3. Buisness

    I took a test for my business class and I'm having trouble with these questions. Any help would be appreciated! Thank you! 5.Jim is beginning his research on franchise businesses in order to find one that meets his needs. A quick,

    asked by Maliya on September 14, 2015
  4. Accounting

    Can anyone tell me if this is correct? I have been hired into a new company to oversee the accounting department. What type of financial reports would I expect to see in the department? How will I use the financial reports

    asked by Anonymous on September 4, 2008
  5. Economics

    Jim left his previous job as a sales manager and started his own sales consulting business. He previously earned $70,000 per year, but he now pays himself $25,000 per year while he is building the new business. What is the

    asked by Ace on November 19, 2011

You can view more similar questions or ask a new question.