CMobile Wireless needed additional capital to expand so the

C-Mobile Wireless needed additional capital to expand so the business incorporated. The charter from the state of Georgia authorizes C-Mobile to issue 60,000 shares of 8%, $50 par value cumulative preferre stock and 160,000 shares of $4 par value common stock. During the first month, C- Mobile completed the following transactions Click the icon to view the transactions.) Read the reguirements. More Info Oct 25: Paid the cash dividend. Date Accounts and Explanation Debit Credit Oct. 2 Issued 21,000 shares of common stock for a building with a market value Oct. 25 of $210,000 6 Issued 550 shares of preferred stock for $100 per share 9 Issued 10,000 shares of common stock for cash of $50,000 10 Declared a $13,000 cash dividend for stockholders of record on Oct. 20 Use a separate Dividends Payable account for preferred and common stock 25 Paid the cash dividend Requirement 2. Prepare the stockholders\' equity section of C-Mobile\'s balance sheet at October 31, 2018. Assum PrintDone C-Mobile Wireless Balance Sheet (Partial) October 31, 2018 Stockholders\' Equity Paid-In Capital: Requirements 1. 2. Record the transactions in the general journal. Prepare the stockholders\' equity section of C-Mobile\'s balance sheet at October 31, 2018. Assume C Mobile\'s net income for the month was $91,000 Total Paid-In Capital Print Done Total Stockholders Equity

Solution

Answer:

1

Date

Accounts and Explanation

Debit

Credit

Oct. 2

Building

210,000

Common Stock—$4 Par Value($4 per share × 21,000 shares)

84,000

Paid-In Capital in Excess of Par—Common ($210,000– $84,000)

126,000

Issued common stock for building

6

Cash ($100 per share × 550 shares)

55,000

Preferred Stock—$50 Par Value($50 per share × 550 shares)

27,500

Paid-In Capital in Excess of Par—Preferred ($55,000 ? $27,500)

27,500

Issued preferred stock for cash

9

Cash

50,000

Common Stock—$4 Par Value($4 per share × 10,000 shares)

40,000

Paid-In Capital in Excess of Par—Common ($50,000 – $40,000)

10,000

Issued common stock for cash

10

Cash Dividends

13,000

Dividends Payable—Preferred

2,200

Dividends Payable—Common

10,800

Declared cash dividend.*

25

Dividends Payable—Preferred

2,200

Dividends Payable—Common

10,800

Cash

13,000

Paid cash dividend.

Working for the devinded

*

*Total Dividend

13000

Dividend to Preferred Stockholders
(8%*50*550)

2200

Dividend to Common Stockholders

10800

__________________________________________________________________

2

C-CELL WIRELESS

Balance Sheet (Partial)

31-Oct-18

Stockholders’ Equity

Paid-In Capital:

     Cumulative Preferred Stock—8%, $50 Par Value; 60,000 shares authorized, 550 shares issued and outstanding

$27,500

     Paid-In Capital in Excess of Par—Preferred

$27,500

     Common Stock—$4 Par Value; 160,000 shares authorized, 31,000 shares issued and outstanding

124,000

     Paid-In Capital in Excess of Par—Common

136,000

     Total Paid-In Capital

315,000

Retained Earnings*

78,000

Total Stockholders’ Equity

$393,000

*income $91,000 – Dividends $13,000 = $78,000

Date	Accounts and Explanation	Debit	Credit
Oct. 2	Building	210,000
	Common Stock—$4 Par Value($4 per share × 21,000 shares)		84,000
	Paid-In Capital in Excess of Par—Common ($210,000– $84,000)		126,000
	Issued common stock for building
6	Cash ($100 per share × 550 shares)	55,000
	Preferred Stock—$50 Par Value($50 per share × 550 shares)		27,500
	Paid-In Capital in Excess of Par—Preferred ($55,000 ? $27,500)		27,500
	Issued preferred stock for cash
9	Cash	50,000
	Common Stock—$4 Par Value($4 per share × 10,000 shares)		40,000
	Paid-In Capital in Excess of Par—Common ($50,000 – $40,000)		10,000
	Issued common stock for cash
10	Cash Dividends	13,000
	Dividends Payable—Preferred		2,200
	Dividends Payable—Common		10,800
	Declared cash dividend.*
25	Dividends Payable—Preferred	2,200
	Dividends Payable—Common	10,800
	Cash		13,000
	Paid cash dividend.