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Preparing Corporate Financial Statements Rivers Edge Canoe & Kayak is authorized to

Accounting: First Year Course | 1st Edition | ISBN: 9780078688294 | Authors: Glencoe ISBN: 9780078688294 416

Solution for problem 21-8 Chapter 21

Accounting: First Year Course | 1st Edition

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Accounting: First Year Course | 1st Edition | ISBN: 9780078688294 | Authors: Glencoe

Accounting: First Year Course | 1st Edition

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Problem 21-8

Preparing Corporate Financial Statements Rivers Edge Canoe & Kayak is authorized to issue 10,000 shares of $100 par, preferred 9% stock and 500,000 shares of $5 par common stock. The following balances appeared in the Balance Sheet section of the companys work sheet for the year ended December 31. Instructions 1. Prepare the statement of stockholders equity. a. During the period the corporation issued 500 shares of 9% preferred stock at par and 25,000 shares of common stock at $9. b. The net income for the year was $425,000. 2. Prepare the balance sheet. 101 Cash in Bank $506,010 115 Accounts Receivable 850,680 120 Notes Receivable 400,000 130 Merchandise Inventory 388,815 135 Prepaid Ins. 3,600 140 Supplies 10,500 145 Delivery Truck 139,298 150 Store Equipment 363,009 201 Accounts Payable 62,412 202 Dividends PayablePreferred 22,500203 Dividends PayableCommon $150,000 210 Fed. Corp. Income Tax Payable 20,000 215 Sales Tax Payable 4,500 301 Preferred Stock 500,000 303 Common Stock 750,000 304 Paid-in Capital in Excess of Par 300,000 305 Retained Earnings 735,000 307 DividendsCommon 262,500 308 DividendsPreferred 45,000

Step-by-Step Solution:

Problem 21-8

Preparing Corporate Financial Statements Rivers Edge Canoe & Kayak is authorized to issue 10,000 shares of $100 par, preferred 9% stock and 500,000 shares of $5 par common stock. The following balances appeared in the Balance Sheet section of the company’s work sheet for the year ended December 31.

Instructions

1. Prepare the statement of stockholder’s equity.

    a. During the period the corporation issued 500 shares of 9% preferred stock at par and 25,000 shares of common stock at $9.

    b. The net income for the year was $425,000.

2. Prepare the balance sheet.

                                                               Step by Step Solution

Step 1 of 3

Balance Sheet is one of the financial statements which represent the value of assets owned by the enterprise, liabilities owed to outsiders and stockholder’s equity. It helps in measuring the actual worth of the business on a particular date.

Step 2 of 3

Chapter 21, Problem 21-8 is Solved
Step 3 of 3

Textbook: Accounting: First Year Course
Edition: 1
Author: Glencoe
ISBN: 9780078688294

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Preparing Corporate Financial Statements Rivers Edge Canoe & Kayak is authorized to