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Exercise 13-7 Issuing shares and preparing the shareholders' equity section of the balance sheet...

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Accounting

Exercise 13-7
Issuing shares and preparing the
shareholders' equity section of
the balance sheet
Total shareholders' equity
$465,000
The articles of incorporation for Mid-way Consulting Inc. authorize the company to issue
500,000$5 preferred shares and 1,000,000 common shares. During its first year of opera-
tions, Mid-way Consulting Inc. completed the following selected transactions:
2014
Jan. 4 Issued 5,000 common shares to the consultants who formed the corporation,
receiving cash of $140,000.
13 Issued 500 preferred shares for cash of $55,000.
14 Issued 4,000 common shares in exchange for land valued at $120,000.
Dec. 31 Earned a profit for the fiscal year and closed the $150,000 net income into
Retained Earnings.
Required
Record the transactions in the general journal.
Prepare the shareholders' equity section of the Mid-way Consulting Inc. balance sheet
at December 31,2014.
image

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