90.2K

Verified Solution

Link Copied!

Required information E11-2 (Algo) Reporting Stockholders' Equity and Determining Dividend Policy [LO 11-2, LO 11-3] [The following information applies to the questions displayed below] Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $2 par value. During its first year, the following selected transactions were completed: a. Issued 6,600 shares of common stock for cash at $26 per share. b. Issued 2,600 shares of common stock for cash at $29 per share. 1. Complete the table below, Indicating the account, amount, and direction of the effect for the above transactions. (Enter any decreases to occount balances with o minus sign.) 2. Prepare the journal entry required for each of these transactions, (If no entry is required for a transoction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the issuance of 6,600 shares of common stock with a par value $2 for a price of $26 per share. Note: Enter debits before credis. Journal entry worksheet Record the issuance of 2,600 shares of common stock with a par value $2 for a price of $29 per share. Note: Enter debits before credits. 3. Prepare the stockholders' equity section as it should be reported on the year-end balance sheet. At year-end, the accounts reflected a profit of $100. 4. Incentive Corporation has $36,000 in the company's bank account. At year-end, the accounts reflected a profit of $100. What is the maximum amount of cash dividends the company can declare and distribute

Answer & Explanation Solved by verified expert

See Answer