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Preparing Corporate Financial Statements Rivers Edge Canoe & Kayak is authorized to
Chapter 21, Problem 21-8(choose chapter or problem)
Preparing Corporate Financial Statements
River's 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.
| 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 Payable—Preferred | 22,500 |
| 203 Dividends Payable—Common | $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 Dividends—Common | 262,500 |
| 308 Dividends—Preferred | 45,000 |
Questions & Answers
QUESTION:
Preparing Corporate Financial Statements
River's 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.
| 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 Payable—Preferred | 22,500 |
| 203 Dividends Payable—Common | $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 Dividends—Common | 262,500 |
| 308 Dividends—Preferred | 45,000 |
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.