The partners who own Liard Rafts Co. wished to avoid the unlimited personal liab
ID: 2473416 • Letter: T
Question
The partners who own Liard Rafts Co. wished to avoid the unlimited personal liability of the partnership form of business, so they incorporated as Liard Rafts. Inc. The charter from the state of Nevada authorizes the corporation to issue 130.000 shares of $10 par common stock. In its first month. Liard Raft completed the following transactions: Record the transactions in the journal. (Record debits first, then credits. Exclude explanations from any journal entries.) Jan 6: Issued 200 shares of common stock to the promoter for assistance with issuance of the common stock. The promotional fee was $4,000. Debit Organization Expense. Jan 9: Issued 5.000 shares of common stock to Lou Liard and 15.000 shares to Larry Liard in return for cash equal to the stock's market value of $22 per share. The two men were partners in Liard Rafts Co. Jan 26: Issued 1.500 shares of common stock for $18 cash per share. balance sheet at January 31, 2015. The ending balance of Retained Earnings balance is $80,000. (Enter the accounts in the proper order for the stockholders' equity section of the balance sheet.) Prepare the stockholders' equity section of the Liard Rafts. Inc. balance sheet at January 31, 2015. The ending balance of Retained Earnings balance is $80,000. (Enter the accounts in the proper order for the stockholders' equity section of the balance sheet.)Explanation / Answer
(‘1) Journal Entry
Date
Account Details
Debit
Credit
Jan 6
Organisation Expense
4,000
Common Stock
(200 x $10)
2000
Paid in Capital in Excess of Par
2,000
Jan 9
Cash
(20,000 x $22)
440,000
Common Stock
(20,000 x $10)
200,000
Paid in Capital in Excess of Par
240,000
Jan 26
Cash
(1500 x $18)
27,000
Common Stock
15,000
Paid in Capital in Excess of Par
12,000
(‘2) Stock Holder’s Equity as on Jan 31,2015
Stock Holders’ Equity
Amount
Common Stock $10 par value, 130,000 shares authorised, 21700 shares issued and outstanding
217,000
Paid in Capital in Excess of Par- Common Stock
254,000
Total Contributed Capital
457,000
Retained Earnings
80,000
Total Stockholders’ Equity
537,000
Date
Account Details
Debit
Credit
Jan 6
Organisation Expense
4,000
Common Stock
(200 x $10)
2000
Paid in Capital in Excess of Par
2,000
Jan 9
Cash
(20,000 x $22)
440,000
Common Stock
(20,000 x $10)
200,000
Paid in Capital in Excess of Par
240,000
Jan 26
Cash
(1500 x $18)
27,000
Common Stock
15,000
Paid in Capital in Excess of Par
12,000
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