Prepare the shareholders’ equity

1. Fleishman Corporation issued 5,000 shares of its no-par common stock for $28 per share and 510 shares of its $50 par value preferred stock for $52.50 per share. Prepare the journal entries to record the sale of the stock.

2. Kidwell, Inc., is authorized to issue 5,000,000 shares of no-par common stock and 800,000 shares of $30 par value preferred stock. During its first year of operation, the company issued 1,200,000 shares of common stock for a total amount of $20,400,000 and 250,000 shares of preferred stock for a total of $8,750,000. The firm has net income of $535,000 for the year, but it declared no dividends. Prepare the shareholders’ equity section of the balance sheet as it would appear after the first year’s operation.

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Stephenson Products issued 9,000 shares of its $1 par value common stock in exchange for some machinery. Prepare the journal entry for each of the following situations:

A. The machinery has a fair market value of $187,000.

B. The machinery has a list price of $245,000, but the stock sold earlier in the day for $26 per share.

Make the entries for the following events of the Burns Corporation:

A. Sold 3,000 shares of a $30 par value preferred stock for $102,000.

B. Declared a two-for-one stock split on its $2 par value common stock. There are 1,600,000 shares of common stock authorized and 300,000 issued and outstanding.

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