Write general journal entries to record the transactions

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Reference no: EM132499

Question:

Uzi Company received a charter granting the right to issue 200,000 shares of $1 par value common stock and 10,000 shares of 8% nonparticipating and cumulative, $50 par value preferred stock that is callable at $80 per share. Selected transactions are shown below.

2011

Feb.       19 Issued 45,000 shares of common stock at par for cash.

               22 Gave the corporation's promoters 30,000 shares of common stock for their services in getting the corporation organized. The directors valued the services at $50,000.

Mar        30 Exchanged 100,000 shares of common stock for the following assets at fair market values: land, $25,000; building, $100,000; and machinery, $125,000.

Dec.       31 Closed the Income Summary account. A $25,000 loss was incurred.

2012

Jan. 12  Issued 1,000 shares of preferred stock at $75 per share.

Dec. 15 The board of directors declared an 8% dividend on preferred shares and $0.10 per share on outstanding common shares, payable on January 31 to the January 17 stockholders of record.

31 Closed the Income Summary account. A $69,000 net income was earned.

2013

Jan. 31 Paid the previously declared dividends.

Required:

1. Write general journal entries to record the selected transactions.

2. Write a stockholders' equity section as of the close of business on December 31, 2012.

3. Evaluate the book value per preferred share and per common stock as of December 31, 2012.

4. Give a rationale between 200 and 300 words in length for buying or not buying this stock based on the financial information presented.

Reference no: EM132499

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