EX 12-8 Issuing stock Obj. 2 Professional Products Inc., a wholesaler of office

Question

EX 12-8 Issuing stock Obj. 2 Professional Products Inc., a wholesaler of office products, was organized on February 5 of the current year, with an authorization of 50,000 shares of preferred 2% stock, $40 par and 1,000,000 shares of $8 par common stock. The following selected transactions were completed during the first year of operations: Feb. 5. Issued 600,000 shares of common stock at par for cash. 5. Issued 1,500 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation. Apr. 9. Issued 45,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $100,000, $310,000, and $85,000 respectively. June 14. Issued 30,000 shares of preferred stock at $53 for cash. Journalize the transactions.

Explanation / Answer

Feb-05 Cash 4800000 =600000*8        Common Stock 4800000 Feb-05 Organizational Expense 12000 =1500*8        Common Stock 12000 Apr-09 Land 100000 Buildings 310000 Equipment 85000        Common Stock 360000 =45000*8        Paid-In Capital in Excess of Par-Common Stock 135000 Jun-14 Cash 1590000 =30000*53         Preferred Stock 1200000         Paid-In Capital in Excess of Par-Preferred Stock 390000

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