..il AT&T; Wi-Fi 10:19 PM ezto.mheducation.com Question (o 2.50 points Hammond C
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..il AT&T; Wi-Fi 10:19 PM ezto.mheducation.com Question (o 2.50 points Hammond Corporation was formed when it issued shares of common stock to two of its shareholders. Hammond issued 8,000 shares of $8 par common stock to P. Coldwell in exchange for $80,000 cash (the issue price was $10 per share). Hammond also issued 2,600 shares of stock to M. Roberts in exchange for a one- year-old delivery van on the same day. Roberts had originally paid $31,200 for the van. Required What was the market value of the delivery van on the date of the stock issue? Show the effect of the two stock issues on Hammond's books in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). Use NA to indicate that an element was not affected by the event. Show effect on the accounting equation in the order provided in the question. (Enter any decreases to account balances and cash outflows with a minus sign.) Revenue-Expense Net IncomeCash Flow Stock Capital In References Book& Resources Dfoulty: 2 Medium Check mu wnrkExplanation / Answer
Requirement a:
Market Value of delivery van = Issue price of shares issued to M.Roberts in exchange of delivery van
= 2600 * 10
= $26000
Requirement b: HAMMOND CORPORATION Horizontal Statements Model Event Balance Sheet Income Statement Statement of Cash Flow Assets = Stockholders' Equity Revenue - Expense = Net Income Cash + Van = Common stock + Paid in capital in excess 1 80000 = 64000 + 16000 80000 FA 2 26000 = 20800 + 5200 NARelated Questions
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