Accounting 2

hho9e_p12_30a_eip_stud.xls

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P12-30A


Accounting, 9e
P12-30A	Issuing stock and preparing the stockholders' equity section of the balance sheet
LO 3 [15-20 minutes]
		Students please fill-in areas that are shaded
Student Name
Course Name
Student ID:
Date:
Lincoln-Priest, Inc., was organized in 2011. At December 31, 2011, the Lincoln-
Priest balance sheet reported the following stockholders’ equity:
LINCOLN-PRIEST, INC.
Stockholders' Equity
December 31, 2011
Paid-in Capital:
Preferred stock, 7%, $40 par, 110,000 shares authorized, none issued				$0
Common stock, $1 par, 520,000 shares authorized, 61,000 shares issued
and outstanding				$61,000
Paid-in capital in excess of par - common				41000
	Total paid-in capital			$102,000
Retained earnings				29000
Total stockholders' equity				$131,000
Requirements
1.	During 2012, the company completed the following selected transactions.
	Journalize each transaction. Explanations are not required.
	a. Issued for cash 1,300 shares of preferred stock at par value.
	b. Issued for cash 2,400 shares of common stock at a price of $5 per share.
	c. Net income for the year was $74,000, and the company declared no dividends.
	Make the closing entry for net income.
2.	Prepare the stockholders’ equity section of the Lincoln-Priest balance sheet at
	December 31, 2012.
Test Your Knowledge
P12-30A
Req. 1
Journal
DATE	ACCOUNTS AND EXPLANATIONS		DEBIT	CREDIT
a.
b.
c.
Req. 2
	LINCOLN-PRIEST, INC.
	Stockholders' Equity
	Paid-in capital:
	Paid-in capital in excess of par - common		41,000
	Total paid-in capital		41,000
	Retained earnings
	Total stockholder's equity		$ 41,000
	*61,000 + 2,400 = 63,400 shares

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