In 2017 the Hicklien Corporation was formed The corporate ch

In 2017, the Hicklien Corporation was formed. The corporate charter authorizes the issuance of 10,000,000 shares of $1 par value common stock, and 4,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock.      The following selected transactions took place in 2017:

>1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares.

>25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500.

>200,000 shares of preferred stock were issued for cash. The market price of the stock was $95.

>10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization.

>5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100

>15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000.   The stock was selling in the market at $102 per share.

INSTRUCTIONS:

Prepare a stockholders’ equity section of the Hicklien Corporation balance sheet dated December 31, 2017.    Include full disclosure.

Solution

stockholders’ equity section of the Hicklien Corporation balance sheet dated December 31, 2017. Stock holders Equity Amount in $ Amount in $ Paid in capital preferred stock $5 par value 4000,000 Shares authorised, 220,000 Sahres are issued and outstanding $1,100,000 Common Stock $1 par , 10,000,000 Authorised, 1,235,000 Shares are issued and outstanding $1,235,000 Total capital Stock $2,335,000 Additional paid in capital In execess of par value -- preferred Stock $20,050,000 In execess of par value -- Common Stock $11,039,500 Total Additional paid in capital $31,089,500 Total paid in capital $33,424,500 Retained earnings $0 Total paid in capital And retained Earnings $33,424,500 Less: trasury Stock $0 Total Stock holders equity $33,424,500 Working notes Common Stock paid in capital inexcess of par value - Common Stock Preferred Stock paid in capital inexcess of par value - Preferred Stock 1 1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares. $                12,00,000 $                                   1,08,00,000 (1200,000*$1) (1200,000*($10-$1)) 2 25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500. $                25,000.00 $                                   2,14,500.00 (25000*$1) ($239500-25000) 3 200,000 shares of preferred stock were issued for cash. The market price of the stock was $95 $      10,00,000.00 $                1,80,00,000.00 (200,000*$5 (200,000*($95-$5) 4 10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization $                10,000.00 $                                       25,000.00 (10,000*$1) ($35000-$10,000) 5 5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100 $            25,000.00 $                      4,75,000.00 (5000*$5) (5000*($100-$5) 6 15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000. $            75,000.00 $                    15,75,000.00 (15000*$5) ($1650,000-75000) Amount $          12,35,000.00 $                             1,10,39,500.00 $      11,00,000.00 $                2,00,50,000.00 $                                                  3,34,24,500.00 Number of Shares issued 1235000 220000