Instructions: Complete 1-18 below. If no journal entry is needed, simply put “No entry necessary.” This assignment can be completed in...

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Instructions: Complete 1-18 below. If no journal entry is needed, simply put “No entry necessary.” This assignment can be completed in either: Microsoft Excel, Word, or hand-written and scanned in PDF format. Joe is starting a corporation and is hiring you as his accountant. Joe creates a publicly held corporation called Joe Co. on January 1, 2013. The state charter authorizes 1,000 shares of 8%, $10-par value preferred stock and 20,000 shares of $1-par value common stock. Part A) Complete journal entries in good form for the following transactions: 1. On January 1, 2013, Joe Co. issues 1,000 shares of common stock in exchange for the legal office’s organization fees. The law office invoiced Joe Co. $1,500. 2. On February 1, 2013, Joe Co. issues 5,000 shares of common stock at $2 per share. 3. On March 1, 2013, Joe Co. issues all 1,000 shares of preferred stock for $15 per share. 4. On April 1, 2013, Joe Co. needs equipment to start the business and issues 4,000 shares of common stock. The fair value of the equipment is $5,000. 5. On May 1, 2013, Joe Co. purchases back 1,000 of its shares for $1,500. 6. On December 1, 2013, Joe Co. officially declares a $500 dividend to be paid at a later date. 7. On December 31, 2013, Joe Co. is preparing its closing entries and records net income of $10,000. 8. Record income taxes for 2013 assuming a tax rate of 40%. Part B) For the year ending December 31, 2013, assume that no other transactions occurred during the year that would affect stockholders’ equity. 9. Create the stockholders’ equity section of the balance sheet for December 31, 2013. 10. Calculate the return on stockholders’ equity for 2013. Part C) Compete journal entries in good form for the following transactions: 11. On February 1, 2014, Joe realized that there was no depreciation booked for the Equipment that was received in 2013 and an adjustment to the prior period needs to be made. 12. On March 1, 2014, Joe Co. officially records the December 1, 2013 dividend. 13. On April 1, 2014, Joe Co. sells its 1,000 shares of treasury stock for $2,000. 14. On May 1, 2014, Joe Co. pays out the December 1, 2013 dividend (state how much is paid out to common shareholders and how much is paid out to preferred shareholders). 15. On June 1, 2014, Joe Co. declares a $1,000 dividend to be paid at a later date. 16. On August 1, 2014, Joe Co. pays out the June 1, 2014 dividend (state how much is paid out to common shareholders and how much is paid out to preferred shareholders). 17. On October 1, 2014, Joe Co. declares a 10% dividend on its shares of common stock. The fair market value of the common stock at the time of declaration is $3 per share. 18. On December 31, 2014, Joe Co. is preparing its closing entries and records a net loss of $5,000. 19. Record income taxes for 2014 assuming a tax rate of 40%. Part D) For the year ending December 31, 2014, assume that no other transactions occurred during the year that would affect stockholders’ equity. 20. Create the stockholders’ equity section of the balance sheet for December 31, 2014.
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