Using the attached information and general journal:Prepare Max Enterprise's Stockholders equity section of the balance sheet at December 31, 2021. The following information must be clearly stated/shown:information on par values,the number of shares authorized and issued where necessary.the sub total for the total paid in capital.Retained earnings.total stockholders’ equity. 2. The company is desirous of comparing serval financial transactions and possible outcomes to assist in guiding itsdecision-making process. It is assumed that the company will be formed on January 1, 2021 and registered asOsbourne Corporation. The company's charter will authorize 1,000,000 shares of common stock and 400,000,$100 par value, 5% cumulative preferred stock. They have asked each student from your accounting course toprepare the company's journal entries and statement of owner's equity based on the following information which is Journal EntriesAccount ParticularsCash (100000*30)Common Stock (100000*0.6)Additional paid in capital common stock(To record issue 100000 common stock shares @30 per|shareDateDebit ($)Credit ($)3,000,00060,0002,940,000Organisational Costs (14000*100)Preferred Stock(To record the issue of preferred stock for organisationalcosts)1,400,0001,400,000Land650,000BuildingCommon Stock (260000*0.6)Additional paid in capital common stock(To record issue of 260000 common stock shares in exchange|for Land & Building)500,000156,000994,000Income SummaryRetained Earnings900,000900,000(To record close of net income to retained earnings account)Dividend Expense - Common Stock (360000*2)Dividend Expense - Preferred Stock (14000*100*5%)720,00070,000Cash790,000(To record the dividend paid)Retained EarningsDividend Expense - Common StockDividend Expense - Preferred Stock790,000720,00070,000(To record close of dividend account to retained earnings)

Solution Stockholder Equity is the owners equity it is found out after deducting liabilities from…

Journal Entries Account Particulars Cash (100000*30) Common Stock (100000*0.6) Additional paid in capital common stock (To record issue 100000 common stock shares @30 per |share Date Debit ($) Credit ($) 3,000,000 60,000 2,940,000 Organisational Costs (14000*100) Preferred Stock (To record the issue of preferred stock for organisational costs) 1,400,000 1,400,000 Land 650,000 Building Common Stock (260000*0.6) Additional paid in capital common stock (To record issue of 260000 common stock shares in exchange |for Land & Building) 500,000 156,000 994,000 Income Summary Retained Earnings 900,000 900,000 (To record close of net income to retained earnings account) Dividend Expense - Common Stock (360000*2) Dividend Expense - Preferred Stock (14000*100*5%) 720,000 70,000 Cash 790,000 (To record the dividend paid) Retained Earnings Dividend Expense - Common Stock Dividend Expense - Preferred Stock 790,000 720,000 70,000 (To record close of dividend account to retained earnings)

Journal Entries Account Particulars Cash (10000030) Common Stock (1000000.6) Additional paid in capital common stock (To record issue 100000 common stock shares @30 per |share Date Debit ($) Credit ($) 3,000,000 60,000 2,940,000 Organisational Costs (14000100) Preferred Stock (To record the issue of preferred stock for organisational costs) 1,400,000 1,400,000 Land 650,000 Building Common Stock (2600000.6) Additional paid in capital common stock (To record issue of 260000 common stock shares in exchange |for Land & Building) 500,000 156,000 994,000 Income Summary Retained Earnings 900,000 900,000 (To record close of net income to retained earnings account) Dividend Expense - Common Stock (3600002) Dividend Expense - Preferred Stock (14000100*5%) 720,000 70,000 Cash 790,000 (To record the dividend paid) Retained Earnings Dividend Expense - Common Stock Dividend Expense - Preferred Stock 790,000 720,000 70,000 (To record close of dividend account to retained earnings)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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