Acc206 Principles of Accounting II: P12-30A Lincoln-Priest, Inc., was organized in 2011

Acc206 Principles of Accounting II

P12-30A Issuing stock and preparing the stockholders' equity section of the balance sheet [15-20 min]
Lincoln-Priest, Inc., was organized in 2011. At December 31, 2011, the Lincoln-Priest balance sheet reported the following stockholders' equity:
Lincoln-Priest, Inc.
Stockholders' Equity
December 31, 2011
Paid-in Capital:
Preferred Stock, 7%, $40 par, 110,000 shares authorized, none issued -
Common stock, $1 par, 520,000 shares authorized, 61,000 shares issued and outstanding 61,000
Paid-in capital in excess of par - common 41,000
Total paid-in capital 102,000
Retained earnings 29,000
Total Stockholders' Equity $131,000

Requirements
1. During 2012, the company completed the following selected transactions. Journalize each transaction. Explanations are not required.
a. Issued for cash 1,300 shares of preferred stock at par value.
b. Issued for cash 2,400 shares of common stock at a price of $5 per share.
c. Net income for the year was $74,000, and the company declared no dividends. Make the closing entry for net income.
2. Prepare the stockholders' equity section of the Lincoln-Priest balance sheet at December 31, 2012.
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