Question

Suppose Girard Company acquires some equipment from dijon Company in exchange for issuance of 15,000 shares...

Suppose Girard Company acquires some equipment from dijon Company in exchange for issuance of 15,000 shares of Girard's common stock. The equipment was carried on dijon's book at the $525,000 original cost less accumulated depreciation of $250,000. Girard's stock actively trades and has a current market value of $35 per share. Its par value is $1 per share.

Requirements

1 By using the balance sheet equation, show the effects of the transaction of the accounts of girard company and dijon company.

2. Show the journal entries on the book of Girard Company and Dijon Company.

Homework Answers

Answer #1

1)IN BOOKS OF GIRARD COMPANY :

ASSET = LIABILITIES + EQUITY
+525000 +525000

2)In books of DIJON COMPANY

ASSET = LIABILITIES + EQUITY

+ 250000

+250000Gain

Net Effect On asset = +525000 Shares received -275000Book value of asset given

                         = 250000

2)

IN BOOKS OF GIRARD COMPANY :

Date Account title Debit credit
Equipment (15000*35) 525000
Common stock (15000*1) 15000
Paid in capital in excess of par value -common stock 510000

In books of DIJON COMPANY

Date Account title Debit credit
Shares of Girard's company 525000
Accumulated depreciation 250000
Gain on Exchange of asset 250000
Equipment 525000
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Cheetah Corporation’s charter authorized issuance of 500,000 shares of $1 par value common stock and 250,000...
Cheetah Corporation’s charter authorized issuance of 500,000 shares of $1 par value common stock and 250,000 shares of $100 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others. 1. Issued a $100,000 8% bond payable at par and gave as a bonus ten shares of preferred stock, which at that time was selling for $102 a share. 2. Issued 7,500 shares of common stock for land. The land...
Santana Company exchanged equipment used in its manufacturing operations plus $2,000 in cash for similar equipment...
Santana Company exchanged equipment used in its manufacturing operations plus $2,000 in cash for similar equipment used in the operations of Delaware Company. The following information pertains to the exchange. Santana Co. Delaware Co. Equipment (cost) $28,000 $18,000 Accumulated depreciation 19,000 10,000 Fair value of equipment 13,000 15,000 Cash given up   2,000 Prepare the journal entries to record the exchange on the book of Delaware Co.  Assume that the exchange lacks commercial substance. Prepare the journal entries to record the exchange...
4) A corporation issued 6,000 shares of its $2 par value common stock in exchange for...
4) A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include: A) A debit to Common Stock for $12,000. B) A debit to Land for $12,000. C) A credit to Land for $12,000. D) A credit to Additional Paid-in Capital, Common Stock for $72,000. E) A credit to Common Stock for $84,000. 5) Refer to the fact pattern in...
On February 12, 2021, Diego Inc. issued 330,000 of its common shares in exchange for equipment...
On February 12, 2021, Diego Inc. issued 330,000 of its common shares in exchange for equipment for which the cash price was known to be $790,000. The articles of incorporation authorized the issue of 4 million common shares, $1 par per share. The most recent issuance of common shares prior to the acquisition of the equipment was back on May, 1, 2020 for a cash price of $3 per share. What in the following would NOT be included in the...
Duple Company Ltd., reported the following stockholders’ equity on its balance sheet at Dec 31, 2017:...
Duple Company Ltd., reported the following stockholders’ equity on its balance sheet at Dec 31, 2017: Duple Company Ltd. Stockholders’ Equity Dec 31,2017 Paid in Capital Preferred stock, 10%, ? par, 1,000,000 shares authorized, 100,000 shares issued $ 2,000,000 Common stock, par value $? per share, 10,000,000 shares authorized, 2,000,000 shares issued and outstanding 4,000,000 Paid-in Capital excess of par - common 20,000,000 Total paid-in capital 26,000,000 Retained earnings 10,600,000 Total stockholder's equity $36,600,000 Requirements: 1. What is the par...
Supper Company Ltd., reported the following stockholders’ equity on its balance sheet at Dec 31, 2017:...
Supper Company Ltd., reported the following stockholders’ equity on its balance sheet at Dec 31, 2017: Supper Company Ltd. Stockholders’ Equity Dec 31,2017 Paid-in Capital Preferred stock, 10%, ? par, 1,000,000 shares authorized, 100,000 shares issued $ 2,000,000 Common stock, par value $? per share, 10,000,000 shares authorized, 2,000,000 shares issued and outstanding 4,000,000 Paid-in capital in excess of par—common 20,000,000 Total paid-in capital 26,000,000 Retained earnings 10,600,000 Total Stockholders’ equity $36,600,000 Requirements: 1. What is the par value per...
Crane Corporation’s charter authorized issuance of 96,000 shares of $10 par value common stock and 50,400...
Crane Corporation’s charter authorized issuance of 96,000 shares of $10 par value common stock and 50,400 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others. 1. Issued a $9,100, 10% bond payable at par and gave as a bonus one share of preferred stock, which at that time was selling for $103 a share. 2. Issued 510 shares of common stock for equipment. The equipment...
Overland Corporation is authorized to issue 250,000 shares of $1 par value common stock. During 2017,...
Overland Corporation is authorized to issue 250,000 shares of $1 par value common stock. During 2017, Overland Corporation took part in the following selected transactions. ? Issued 55,000 shares of stock at $76 per share, less costs related to the issuance of the stock totaling $27,000. ? Issued 10,000 shares of stock for land appraised at $815,000. The stock was actively traded on a national stock exchange at approximately $78 per share on the date of issuance. ? Purchased 6,000...
Cedric Company recently traded in an older model of equipment for a new model. The old...
Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $301,000 (original cost of $631,000 less $330,000 in accumulated depreciation) and its fair value of the old equipment is $280,000. Cedric paid $71,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Part A In late 2015, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance...
Part A In late 2015, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2016, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $15 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Consider insertsort. Suppose that the input array A has 1% probability to be monotonically decreasing. Show...
    asked 4 minutes ago
  • Your company is thinking of introducing a Bring Your Own Device (BYOD) policy. You have been...
    asked 10 minutes ago
  • Attached is the file GeometricObject.java. Include this in your project, but do not change. Create a...
    asked 12 minutes ago
  • Suppose the number of cars in a household has a binomial distribution with parameters n =...
    asked 15 minutes ago
  • HR needs some information on the new interns put into a database. Given an id, email,...
    asked 36 minutes ago
  • Problem solving strategies Questions years = input("Enter a number of years and I'll tell you how...
    asked 41 minutes ago
  • Calculate ?Hrxn for the following reaction: CH4(g)+4Cl2(g)?CCl4(g)+4HCl(g) Use the following reactions and given ?H?s. C(s)+2H2(g)?CH4(g)?H=?74.6kJC(s)+2Cl2(g)?CCl4(g)?H=?95.7kJH2(g)+Cl2(g)?2HCl(g)?H=?184.6kJ Express...
    asked 47 minutes ago
  • ASCII (American Standard Code for Information Interchange) has an encoding for every character of the alphabet,...
    asked 1 hour ago
  • Is home confinement with electronic monitoring a deterrent? Are there negatives to being confined to one’s...
    asked 1 hour ago
  • Social hostility can have severe lasting effects of interperpersonal relationship during our adolescence years, which if...
    asked 1 hour ago
  • - A series RLC circuit has R=15 ?, L=1.5 H, and C=15 ?F. (a) For what...
    asked 1 hour ago
  • TV Circuit has 30 large-screen televisions in a warehouse in Erie and 60 large-screen televisions in...
    asked 1 hour ago