Harmsen Maintenance Corporation was organized in early 2012 with 60,000 shares of no-par common stock authorized. During 2012, the following transactions occurred

Harmsen Maintenance Corporation was organized in early 2012 with 60,000 shares of no-par common stock authorized. During 2012, the following transactions occurred:

a. Issued 31,000 shares of stock at $24 per share.

b. Issued another 3,900 shares of stock at $28 per share.

c. Issued 3,000 shares for a building appraised at $90,000.

d. Declared dividends of $1.50 per share.

e. Earned net income of $187,000 for the year, including $405,000 of revenues and $218,000 of expenses, and closed these accounts.

f. Closed the dividends accounts.

Given this information:

1. Journalize the transactions.

2. Present the stockholders’ equity section of the balance sheet as it would appear on December 31, 2012.

SOLUTION

1. a. Cash 744,000

Common Stock 744,000

Issued 31,000 shares of no-par common

stock at $24 per share.

b. Cash 109,200

Common Stock 109,200

Issued 3,900 shares of no-par common

stock at $28 per share.