uzi company received a charter granting the right to issue 200 000 shares of 1 par v 501359
Uzi Company received a charter granting the right to issue 200,000 shares of $1 par value common stock and 10,000 shares of 8% cumulative and nonparticipating, $50 par value preferred stock that is callable at $80 per share. Selected transactions are presented below.
2011
Feb. 19 Issued 45,000 shares of common stock at par for cash.
22 Gave the corporation s promoters 30,000 shares of common stock for their services in getting the corporation organized. The directors valued the services at $50,000.
Mar 30 Exchanged 100,000 shares of common stock for the following assets at fair market values: land, $25,000; building, $100,000; and machinery, $125,000.
Dec. 31 Closed the Income Summary account. A $25,000 loss was incurred.
2012
Jan. 12 Issued 1,000 shares of preferred stock at $75 per share.
Dec. 15 The board of directors declared an 8% dividend on preferred shares and $0.10 per share on outstanding common shares, payable on January 31 to the January 17 stockholders of record.
31 Closed the Income Summary account. A $69,000 net income was earned.
2013
Jan. 31 Paid the previously declared dividends.
Required:
Prepare general journal entries to record the selected transactions.
Prepare a stockholders equity section as of the close of business on December 31, 2012.
Determine the book value per preferred share and per common stock as of December 31, 2012.
Provide a rationale between 200 and 300 words in length for buying or not buying this stock based on the financial information presented.
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