"> (Answered) Will you please review my answer to question "E12-5 b" and let me know what I am doing wrong? - Tutorials Prime

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(Answered) Will you please review my answer to question "E12-5 b" and let me know what I am doing wrong?


Will you please review my answer to question "E12-5 b" and let me know what I am doing wrong?


Will you please review my answer to question "E12-5 b" and let me know what I am doing wrong? I attached the entire question and answers. I am not requesting you to answer question "E12-5 a" but included it to help answer question "b." I am confused on which stock prices to calculate for the balance sheet (ie. original, recent sale price, etc.).E12-5Twin Lakes incorporated on April 01, 2015, and was authorized to issue 100,000 shares of $5 par value common stock and 10,000 shares of $8, no-par preferred stock. During the remainder of 2015, the company entered into the following transactions: 1.   Issued 25,000 shares of common stock in exchange for $500,000 cash.2.   Issued 5,000 shares of preferred stock in exchange for $60,000 cash.3.   Purchased 3,000 common shares for $15 per share and held them in the form of treasury stock.4.   Sold 1,000 treasury stock shares for $18 per share on the open market.5.   Issued 1,000 treasury shares to executives who exercised stock options for a reduced price of $5 per share. The company entered into no other transactions that affected the shareholders’ equity during 2015. a.   Prepare the journal entries for each of the transactions.Cash (+A)                                                   500,000           Common Stock (+CC)                                        125,000           Additional Paid-In Capital, C/S (+CC)              375,000Issued common stock (25,000 x $5; 25,000 x $15) Cash(+A)                                                     60,000           Preferred Stock (+CC)                                        60,000Issued preferred stock (5,000 x $8; 5,000 x $4) Treasury Stock (-CC)                              45,000           Cash (-A)                                                                 45,000Purchased treasury stock (3,000 x $15) Cash (+A)                                                     18,000           Treasury Stock (+CC)                                          15,000           Additional Paid-In Capital, T/S (+CC)               3,000Reissued treasury stock (1,000 x $15; 1,000 x $3) Cash (+A) (1,000 x $5)                               5,000Additional Paid-In Capital, S/O (-CC)    3,000Retained Earnings (-RE)                          7,000           Treasury Stock (+CC) (1,000 x $15)                 15,000Issued 1,000 shares of treasury stock as stock options (PLEASE HELP ME WITH THIS PART)b.   Assume the Twin Lakes generated $500,000 in net income in 2015 and did not declare any dividends during 2015. Prepare the shareholders’ equity section of the balance sheet as of December 31, 2015.Twin LakesBalance Sheet                                                       December 31, 2015                                                       Shareholders’ Equity                                                                                                          Preferred Stock (5,000 shares, no par value)                                                   $     90,000Common Stock (25,000 shares, $5 par value)                                                       125,000Additional Paid-In Capital                                                                                       375,000Retained Earnings:                                                                                                 500,000           Restricted:                                                                                        0           Unrestricted:                                                                              7,000             7,000Less: Treasury Stock (1,000 shares x $15)                                                            (15,000)Total Shareholders’ Equity                                                                                 $1,082,000

 


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