Show the effects of each transaction on the accounting

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Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $ 1 par value. During its first year, the following selected transactions were completed:

a. Issued 6,000 shares of common stock for cash at $ 20 per share.

b. Issued 2,000 shares of common stock for cash at $ 23 per share.

Required:

1. Show the effects of each transaction on the accounting equation.

2. Give the journal entry required for each of these transactions.

3. Prepare the stockholders equity section as it should be reported on the year-end balance sheet. At year-end, the accounts reflected a profit of $ 100.

4. Incentive Corporation has $ 30,000 in the company’s bank account. What is the maximum amount of cash dividends the company can declare and distribute?

Reference no: EM13866386

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