Homestead Oil Corp. was incorporated on January 1, 2019, andissued the following stock for...

70.2K

Verified Solution

Question

Accounting

Homestead Oil Corp. was incorporated on January 1, 2019, andissued the following stock for cash:
850,000 shares of no-par common stock were authorized; 140,000shares were issued on January 1, 2019, at $18.00 per share.
250,000 shares of $110 par value, 7.50% cumulative, preferredstock were authorized; 61,000 shares were issued on January 1,2019, at $150 per share.
Net income for the years ended December 31, 2019 and 2020 was$1,400,000 and $2,500,000, respectively.
No dividends were declared or paid during 2019. However, onDecember 28, 2020, the board of directors of Homestead declareddividends of $1,680,000, payable on February 12, 2021, to holdersof record as of January 19, 2021.
Required:
1. Use the horizontal model for the issuance of commonstock and preferred stock on January 1, 2019. Indicate thefinancial statement effect. (Enter decreases with a minussign to indicate a negative financial statementeffect.)

2. Use the horizontal model for the declaration ofdividends on December 28, 2020. Indicate the financial statementeffect. (Enter decreases with a minus sign to indicate anegative financial statement effect.)

3. Use the horizontal model for the payment ofdividends on February 12, 2021. Indicate the financial statementeffect. (Enter decreases with a minus sign to indicate anegative financial statement effect.)

Answer & Explanation Solved by verified expert

4.3 Ratings (585 Votes)

1 Use the horizontal model for the issuance of common stock and preferred stock on January 1 2019 Indicate the financial statement effect Enter decreases with a minus sign to indicate a negative financial statement effect Horizontal model for the issuance of common stock and preferred stock on January 1 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingHomestead Oil Corp. was incorporated on January 1, 2019, andissued the following stock for cash:...Homestead Oil Corp. was incorporated on January 1, 2019, andissued the following stock for cash:850,000 shares of no-par common stock were authorized; 140,000shares were issued on January 1, 2019, at $18.00 per share.250,000 shares of $110 par value, 7.50% cumulative, preferredstock were authorized; 61,000 shares were issued on January 1,2019, at $150 per share.Net income for the years ended December 31, 2019 and 2020 was$1,400,000 and $2,500,000, respectively.No dividends were declared or paid during 2019. However, onDecember 28, 2020, the board of directors of Homestead declareddividends of $1,680,000, payable on February 12, 2021, to holdersof record as of January 19, 2021.Required:1. Use the horizontal model for the issuance of commonstock and preferred stock on January 1, 2019. Indicate thefinancial statement effect. (Enter decreases with a minussign to indicate a negative financial statementeffect.)2. Use the horizontal model for the declaration ofdividends on December 28, 2020. Indicate the financial statementeffect. (Enter decreases with a minus sign to indicate anegative financial statement effect.)3. Use the horizontal model for the payment ofdividends on February 12, 2021. Indicate the financial statementeffect. (Enter decreases with a minus sign to indicate anegative financial statement effect.)