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The following items are taken from the financial statements of Grove Company for 2010:

Accounts Payable $ 18,500
Accounts Receivable 4,000
Accumulated Depreciation 4,800
Bonds Payable 18,000
Cash 24,000
Common Stock 25,000
Cost of Goods Sold 13,000
Depreciation Expense 4,800
Dividends 5,300
Equipment 48,000
Interest Expense 2,500
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Common stock
A company starts with shareholders purchasing $20,000 of stock and creditors offering $5,000 in loan. The inflow of resource is therefore ($20,000 + $5,000) $25,000
The company use $12,000 to purchase Equipment and $8,000 to purchase Inventory. The outflow of resource is therefore ($12,000 + $8,000) $20,000 and the present cash level at ($25,000 - $20,000) $5,000.
Let's generate a balance sheet from the above: Assets | Cash | $5,000 | Inventory | $8,000 | Equipment | $12,000 | Total Assets | $25,000 | Liabilities & Equity | | Owed to Creditors | $5,000 | Common Stock | $20,000 | Total Liab./Equity | $25,000 |

Paid-in Capital let's assume that a corporation's common stock has a par value of $0.10 per share. On March 10, 2010, one share of stock is issued for $13.00. (The $13 amount is the fair market value based on supply and demand for the stock.) The accountant makes a journal entry to record the issuance of one share of stock along with the corporation's receipt of the money (note that the "Common Stock" account reflects the par value of $0.10 per share):

Date | Account Name | Debit | Credit | | March 10, 2010 | Cash | 13.00 | | | | Common Stock | | 0.10 | | | Paid-in Capital in Excess of Par Value | | 12.90 |

While some states require a par value for common stock, other states do not. If there is no par value, some states require a "stated value." If this is the case, the entry will be

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