Tony and Suzie purchased land costing $460,000 for a new camp in January 2014. N
ID: 2472695 • Letter: T
Question
Tony and Suzie purchased land costing $460,000 for a new camp in January 2014. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow another million dollars, but unfortunately the bank turned them down as too risky. Undeterred, they promoted their idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stock in the company to raise the additional funds for the camp. Great Adventures has two classes of stock authorized: 10%, $10 par preferred and $1 par value common. When the company began on July 1, 2012, Tony and Suzie each purchased 14,500 shares of $1 par value common stock at $1 per share. The following transactions affect stockholders’ equity during 2014, its third year of operations: Jul. 2 Issue an additional 112,000 shares of common stock for $14 per share. Sep. 10 Repurchase 11,400 shares of its own common stock (i.e., treasury stock) for $17 per share. Nov. 15 Reissue 4,700 shares of treasury stock at $19 per share. Dec. 1 Declare a cash dividend on its common stock of $268,600 ($2 per share) to all stockholders of record on December 15. The dividend is payable on December 31. 3.value: 10.00 pointsRequired information Required: 1. Record each of these transactions. (Omit the "$" sign in your response.) Date General Journal Debit Credit Jul. 2, 2014 Sep. 10, 2014 Nov. 15, 2014 Dec. 1, 2014 Dec. 31, 2014 ReferenceseBook & Resources WorksheetDifficulty: Hard Check my work 4.value: 10.00 pointsRequired information 2. Great Adventures has net income of $179,000 in 2014. Retained earnings at the beginning of 2014 was $164,000. Prepare the stockholders’ equity section of the balance sheet for Great Adventures as of December 31, 2014. (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)
Explanation / Answer
2-Jul Cash AC dr 1,568,000 Common Stock 112,000 Additional paid in capital 1,680,000 10-Sep Treasury AC dr 193,800 Cash AC 193,800 1-Nov Cash AC dr 89,300 Treasury Stock AC 79,900 Additional paid in cap 9,400 1-Dec Retained earnings AC dr 114,610 Dividends payable AC 114,610 31-Dec Dividends payable AC dr 114,610 Cash AC 114,610 GREAT ADVENTURES, INC. Balance Sheet (Stockholders’ Equity Section) December 31, 2014 Stockholder's Equity: Common Stock (beginning 14,500 + 112,000)= 126,500 Additional Paid-in Capital= 1689400 TOTAL PAID-IN CAP= 1,815,900 Retained Earnings= 114,610 Treasury Stock (193,800 - 79,900)= 113,900 TOTAL STOCKHOLDER'S EQUITY (1,815,900 + 114,610 - 113,900)= 1,816,610