Question - In January 2016, Hammond Corporation was organized and authorized to issue 2,000,000 shares of non-par common stock and 50,000 shares of 5% percent, $50 par value, noncumulative preferred stock. The stock-related transactions for the first year's operations were as follows:
Jan. 19 Sold 15,000 shares of the common stock for $31,500. State law required a minimum of $1 stated value per share.
21 Issued 5,000 shares of common stock to attorneys and accountants for services valued at $11,000 and provided during the organization of the corporation.
Feb. 7 Issued 30,000 shares of common stock for a building that had an Appraised value of $78,000.
Mar. 22 Purchased 10,000 shares of its common stock at $3 per share
July 15 Issued 5,000 shares of common stock to employees under a stock Option plan that allows any employee to buy shares at the current market price, which is now $3 per share.
Aug 1 Sold 2,500 shares of treasury stock for $4 per share
Sept. 1 Declared a cash dividend of $.15 per common share to be paid on September 25 to stockholders of record on September 15.
15 Cash dividends date of record 25 Paid cash dividends to stockholders of record on September 15.
Oct 30 Issued 4,000 shares of common stock for a piece of land. The Stock was selling $3 per share, and the land had a fair market value of $12,000.
Dec. 15 Issued 2,200 shares of preferred stock for $50 per share.
Required:
a. Record the above transactions in journal form.
b. Post to the following T accounts in the ledger: Cash, Land, Building, Cash Dividends Payable, Preferred Stock Common Stock, Paid-in-Capital in Excess of Stated Value, Common, Cash Dividends Declared, and Start-up and Organization Expense
c. Prepare the stockholders' equity section of Hammond Corporation's balance sheet as of December 31, 2016. Net Income earned during the year was $100,000.
d. Calculate book value per share after the transactions.