ABC Company was formed on 712015 It was authorized to issue

ABC Company was formed on 7/1/2015. It was authorized to issue 500,000 shares of $10 per value common stock and 100,000 shares of 8%, 25 par value cummulative non participating preffered stock. ABC has June 30th fiscal year.

At IPO 95,000 shares were issued for 31/share (cash). On July 24, 2015-5000 shares were exchanged for a plot of land which had a FVM of $220,000 at the date of the exchange. On March 1, 2017 10,000 shares were issued for $42/share.

On 11/30/2017, ABC purchased 2,000 shares pf it\'s own stock at $39/share (and elected the cost method).

On 12/15/2017 declared a 5% stock dividend for shareholders of record at 1/15/2018, to be issued on 1/31/18. The stock was selling at $52/share.

On 6/20/2017 ABC sold 500 shares of it treasury for $21,000. ABC issued 100,000 shares of preferred stock at $44/share and dividends on preferred stock was paid at $.50/share.

Re: as of 6/30/2017, ABC had a Re balance of $550,000. For fiscal year ending 2018, ABC reporting NI of $120,000.

Compute Equity section of Balance Sheet and show detailed transactions.

Solution

Date Detail No. of Share Amount Common Stock 30/06/2015 95000 Share issued @ $31 95000 $2,945,000 24/07/2015 5000 Share were issued in lieu of plot of land 5000 $220,000 01/03/2017 10000 Share issued @ $42 1000 $420,000 30/11/2017 2000 shares buyback @$39 -2000 -$78,000 15/12/2017 5% Stock dividen declared on 15/12/2017 , issued (108000*5%)*52 5400 $280,800 20/06/2017 500 Shares isold from treasury 500 $21,000 Total 104900 $3,808,800 Preferred stock 20/06/2017 issued 100,000 share @ 44 100000 $4,400,000 Total Equity stock 204900 $8,208,800 Income earned during the year ended on 2018 $120,000 Dividend paid on Preferred stock @0.50/share -$50,000 Total $8,278,800