15. On June 1, 19—, the Home Manufacturing Company is incorporated under the laws of the state of New York to acquire and conduct the business of the firm of R. O. Browning and H. E. Johnson. The authorized capital stock of the company is $250,000, par value $100 per share. The company has agreed to take over the net assets of the partnership at the following valuation, and to issue in payment 1,000 shares of stock to each of the two partners: real estate $120,000; tools and equipment $60,000; raw materials $20,000. A bill of sale is executed and the stock duly issued. E. O. Kitchell and R. K. Taylor subscribe for 100 shares each. On June 10 the stock subscribed for by Kitchell and Taylor is paid for and issued. On June 14 Browning and Johnson each donate 100 shares of stock to the company to be sold for the purpose of securing additional working capital.
From the foregoing data, make: (a) the entries on the books of the partnership for the sale of the assets; (b) the opening entry of the new corporation.
16. A corporation is organized with an authorized capitalization of 5,000 shares at a par value of $100 each. One-half of the stock is subscribed for at 90 and paid for in two instalments. R. K. Reymer, in return for 1,000 shares of stock, transfers to the corporation his shipyard valued at $80,000. A. R. Paine receives 100 shares of stock for his services in organizing the corporation.
Make the necessary opening entries on the books of the corporation for the above.
17. F. H. Cole and R. D. Harris have patented an improved electric meter and have borrowed $1,500 on their note with which to complete the invention. They organize a corporation with a capital of $50,000, shares $100 each. Cole and Harris each receive $20,000 worth of stock in return for the patent rights transferred to the corporation. The corporation also assumes the payment of the $1,500 note. A. G. Emery, an attorney, is given five shares to pay for services in fulfilling the incorporation requirements. Cole and Harris each donate to the company $10,000 worth of stock to be sold in order to provide working capital; 160 shares of the donated stock are sold for cash at 50% of the par value.
Make the entries on the corporation books for the transactions given above.
18. The Bristol Manufacturing Company issued and sold on the 1st of January, 19—, to A and B (50 to each at the same price), first mortgage bonds of $500 each, bearing interest at 4% per annum, and received $48,000 in cash.
What records of the transactions should be made and in what books?
19. A corporation has an authorized capital stock of $100,000, of which $75,000 is outstanding.
This year’s profit and loss shows a profit of $4,125. The previous surplus balance is $20,150. They declare and pay an 8% dividend.