Chapter 13, Problem 1APSA

Problem 13-1A

Stockholders’ equity transactions and analysis

C2 P1

Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its ?rst year of operations.

a.	Cash …………………………………………………………………………………	300,000
	Common Stock, $25 Par Value …………………………………………		250,000
	Paid-In Capital Excess of Par Value, Common Stock …………..		50,000
b.	Organization Expenses ………………………………………………………	150,000
	Common Stock, $25 Par Value …………………………………………….		125,000
	Paid-In Capital Excess of Par Value, Common Stock ……………		25,000
c.	Cash …………………………………………………………………………………..	43,000
	Accounts Receivable …………………………………………………………	15,000
	Building ……………………………………………………………………………..	81,500
	Nets Payable ……………………………………………………………………..		59,500
	Common Stock, $25 Par Value …………………………………………….		50,000
	Paid-In Capital Excess of Par Value, Common Stock ……………		30,000
d.	Cash …………………………………………………………………………………..	120,000
	Common Stock, $25 Par Value …………………………………………….		75,000
	Paid-In Capital Excess of Par Value, Common Stock ……………		45,000

Required

1. Explain the transaction(s) underlying each journal entry (a) through (d).

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 $695,000?

Check (2) 20,000 shares

(3) $500,000

(4) $650,000