Reference no: EM132842001

Question - The MM CORPORATION was organized the State of Wisconsin's. The charter authorized the

1. Issuance of 1,000,000 shares of $ 2 PAR VALUE COMMON STOCK and additional 25000 shares of 4%, 20 par value cumulative convertible preferred stock that is callable $22 per share.

Transactions that relate to the stock of the company are shown below

Feb 2 Issued 1,00,000 shares of common stock for $ 250,000.

Mar 5 Issued 60,000 shares of common stock JM CORPOARATION in exchange for a Building and land, which had an appraised value of $ 100,000 and $ 25000 , respectively.

July 15 Issued 25000 shares of preferred stock for $500,000.

Dec 31 The Company reported earnings of $ 40,000 for 2018 and the board declared dividends of $20000. Dividends include preferred stock cash dividend for one- half year.

Required -

a) Prepare the journal entries necessary to record these stock-related transactions.

b) Prepare the stockholder's equity section of this corporation balance sheet as of december31.

c) Calculate the EPS BASIC if number of shares outstanding/issued common stock are 10000 at the beginning of the year and at the end of the year 20,000.