The partners who own Bassett Furniture Co. wished to avoid the unlimited personal liability of the partnership form of
The partners who own Bassett Furniture Co. wished to avoid the unlimited personal liability of the partnership form of business, so they incorporated as BFC Inc. The articles of incorporation from the province of Manitoba authorize the corporation to issue 10,000 $6 preferred shares and 250,000 common shares. In its first month, BFC completed the following transactions:
Jan. 3 Issued 1,000 common shares to the promoter for assistance with issuance of the common shares. The promotional fee was $10,000. Debit Organization Expense.
6 Issued 5,000 common shares to Jo Bassett, and 3,800 shares to Mel Bassett in return for cash equal to the market price of $11 per share. (The Bassetts were partners in
Bassett Furniture Co.)
12 Issued 1,000 preferred shares to acquire a patent with a fair value of $110,000.
22 Issued 1,500 common shares for $12 cash per share.
1. Record the transactions in the journal.
2. Prepare the shareholders' equity section of the BFC Inc. balance sheet at January 31. The ending balance of Retained Earnings is $89,000?