Assume that a start-up manufacturing company raises capital through a series of equity issues.
(a) Using the financial statement template below, summarize the financial statement effects of the following transactions.
Identify the account affected and use plus and minus signs to indicate the increases and decreases in the specific element of the balance sheet (assets, liabilities, components of shareholders’ equity).
(1) Issues 100,000 shares of $1 par value common stock for $10 per share.
(2) Receives land in exchange for 10,000 shares of $1 par common stock when the common stock is trading in the market at $15 per share. The land has no readily determinable market value.
(b) In each case, how does the company measure the transaction? What
measurement attribute is used?
Assets = Liabilities + Stockholders Equity
CC AOCI RE
Journal Entry:
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Assume that a start-up manufacturing company raises capital through a series of equity issues.
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