APTER 13HOMEWORK p15 6 Check my work Problem 131A Stockholde

APTER 13-HOMEWORK -p1-5 6 Check my work Problem 13-1A Stockholders\' equity transactions and analysis LO C2, P1 Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries ts 280,000 Common stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 240,000 40,000 Ask b. Organization Expenses 170,000 Common Stock, $25 Par Value 129,000 41,000 44,500 16,500 81,600 C. Cash Building Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 59,900 52,700 30,000 d. Cash 133,000 Common Stock, $25 Par Value Paid-In Capital in 79,000 54,000 s of Par Value Required 2. How many shares of common stock are outstanding at year-end? 3. What is the amount of minimum legal capital (based on par value) at year-end? 4. What is the total paid-in capital at year-end? 5. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $7870002 Prev1 of 13Next>

Solution

Answer to Requirement 2.

Common Stock Issued in Transaction a. = 240,000 / 25 = 9,600 Shares
Common Stock Issued in Transaction b. = 129,000 / 25 = 5,160 Shares
Common Stock Issued in Transaction c. = 52,700 / 25 = 2,108 Shares
Common Stock Issued in Transaction d. = 79,000 / 25 = 3,160 Shares

Common Stock Outstanding at the year-end = 9,600 + 5,160 + 2,108 + 3,160
Common Stock Outstanding at the year-end = 20,028 Shares

Answer to Requirement 3.

Minimum Legal Capital = Common Stock Outstanding at year end * Par Value
Minimum Legal Capital = 20,028 * $25
Minimum Legal Capital = $500,700

Answer to Requirement 4.

Total Paid-in Capital = Common Stock + Paid-in Capital

Total Paid-in Capital in Transaction a. = $240,000 + $40,000 = $280,000
Total Paid-in Capital in Transaction b. = $129,000 + $41,000 = $170,000
Total Paid-in Capital in Transaction c. = $52,700 + $30,000 = $82,700
Total Paid-in Capital in Transaction d. = $79,000 + $54,000 = $133,000

Total Paid-in Capital at Year End = $280,000 + $170,000 + $82,700 + $133,000
Total Paid-in Capital at Year End = $665,700

Answer to Requirement 5.

Book Value per Share of Common Stock = Total Paid- In Capital & Retained Earning / Stock Outstanding
Book Value per Share of Common Stock = 787,000 / 20,028
Book Value per Share of Common Stock = $39.29