Accounting

You are presented with another set of scenarios where you will perform various functions regarding incorporation and statement of cash

flows. Use the linked files below to complete this exercise.
This problem has a value of 10% of the final grade.
Jumpin-JehoSaphats is owned by Jessica Jean (JJ)Saphats.  Jessica wants to incorporate her business but is not sure of the differences

between the current form of sole proprietorship and changing to a corporation.   She has come to you to discuss the future of her company.
Part 1.   10%Discuss in detail the requirements of incorporating JJ’s company.  What are the advantages and disadvantages of this plan?  What

must she do to become a corporation?
Part 2.  30%On January 1, Jumpin-JehoSaphats was incorporated.  Jessica is going to raise capital by issuing stock.  Using the data provided

record the transactions, post to T accounts and create the shareholder’s equity section of the Balance Sheet for February 28.
Jumpin-JehoSaphats has been authorized to issue 1,000,000 common shares with a Par Value of $10.  Jessica had a capital account of $150,000

when the corporation was created.
January 7, the company issued 300 shares @ $11/share
January 15, the company issued 950 shares @ $14/share
January 19, the company issued 100 shares @ $15/share
January 30, the company issued 50 shares @ $12/share
February 5, the company issued 200 shares @ $9/share
February 9, the company issued 75 shares @ $13/share
February 18, the company issued 180 shares @ $7.5/share
February 22, the company issued 90 shares @$10/share
February 24, the company issued 25 shares @ $8/share

Part 3. 30%Jessica is contemplating expanding the company and must determine the capital requirements.  Using the data below, determine the

amount that must be placed in reserve that will provide the funds necessary at the expected time.
Jessica has calculated that she will need $2,000,000 in 5 years.  There are two different investments being considered.    One pays 6% APR

compounded quarterly for 5 years.   The other pays 25% at the end of the 5 year period.   Calculate the amount that must be invested today in

each to yield the required amount and then recommend the better investment.
Part 4.30%Over the past 6 years Jumpin-JehoSaphats has been expanding and raising additional capital.  The company currently has 50,000

common shares issued and outstanding.
Four years ago the company issued 5,000 shares of 3% Cumulative Preferred Shares at $1000 par.
•    In year 1 $40,000 dividends were paid.
•    In year 2 the Board of Directors issued $75,000 dividends to be paid out.
Now in the fourth year,on March 6th the Board of Directors declared a dividend of $3 per common share to be paid on May 15th to owners of

record on March 30th.     Given this information determine the amount of dividends that must be paid out by the company and record all of the

required journal entries to carry out the Board’s Directive.