following are the issuances of stock transactions. 1. a corporation issued 5,000 shares of $10 par - value…

following are the issuances of stock transactions. 1. a corporation issued 5,000 shares of $10 par - value common stock for $60,000 cash. 2. a corporation issued 2,500 shares of no - par common stock to its promoters in exchange for their efforts, estimated to be worth $53,000. the stock has a $2 per share stated value. 3. a corporation issued 2,500 shares of no - par common stock to its promoters in exchange for their efforts, estimated to be worth $53,000. the stock has no stated value. 4. a corporation issued 1,250 shares of $100 par - value preferred stock for $178,000 cash. exercise 13 - 5 (algo) analyzing impact of stock issuance transactions lo p1 analyze each transaction from issuances of stock by showing its effect on the accounting equation—specifically, identify the accounts and amounts (including + or -) for each transaction.

following are the issuances of stock transactions. 1. a corporation issued 5,000 shares of $10 par - value common stock for $60,000 cash. 2. a corporation issued 2,500 shares of no - par common stock to its promoters in exchange for their efforts, estimated to be worth $53,000. the stock has a $2 per share stated value. 3. a corporation issued 2,500 shares of no - par common stock to its promoters in exchange for their efforts, estimated to be worth $53,000. the stock has no stated value. 4. a corporation issued 1,250 shares of $100 par - value preferred stock for $178,000 cash. exercise 13 - 5 (algo) analyzing impact of stock issuance transactions lo p1 analyze each transaction from issuances of stock by showing its effect on the accounting equation—specifically, identify the accounts and amounts (including + or -) for each transaction.

Answer

Explanation:

Step1: Analyze transaction 1

Cash (Asset) increases by $60,000. Common - Stock (Equity) increases by $5,000\times10 = $50,000 and Additional - Paid - in - Capital (Equity) increases by $60,000 - 50,000=$10,000.

Step2: Analyze transaction 2

No - par stock with stated value. Promoters' services are considered an asset (Intangible Asset) worth $53,000. Common Stock (Equity) increases by $2,500\times2 = $5,000 and Additional - Paid - in - Capital (Equity) increases by $53,000 - 5,000 = $48,000.

Step3: Analyze transaction 3

No - par stock with no stated value. Promoters' services (Intangible Asset) increase by $53,000. Common Stock (Equity) increases by $53,000.

Step4: Analyze transaction 4

Cash (Asset) increases by $178,000. Preferred Stock (Equity) increases by $1,250\times100=$125,000 and Additional - Paid - in - Capital (Equity) increases by $178,000 - 125,000 = $53,000.

Transaction Assets = Liabilities + Equity
1 Cash + $60,000 = 0 + Common Stock + $50,000, Additional - Paid - in - Capital + $10,000
2 Intangible Asset + $53,000 = 0 + Common Stock + $5,000, Additional - Paid - in - Capital + $48,000
3 Intangible Asset + $53,000 = 0 + Common Stock + $53,000
4 Cash + $178,000 = 0 + Preferred Stock + $125,000, Additional - Paid - in - Capital + $53,000

Answer:

Transaction Assets = Liabilities + Equity
1 Cash + $60,000 = 0 + Common Stock + $50,000, Additional - Paid - in - Capital + $10,000
2 Intangible Asset + $53,000 = 0 + Common Stock + $5,000, Additional - Paid - in - Capital + $48,000
3 Intangible Asset + $53,000 = 0 + Common Stock + $53,000
4 Cash + $178,000 = 0 + Preferred Stock + $125,000, Additional - Paid - in - Capital + $53,000