(Learning Objectives 2, 6: Account for issuance of stock; prepare the stockholde
ID: 2460239 • Letter: #
Question
(Learning Objectives 2, 6: Account for issuance of stock; prepare the stockholders’ equity section of a balance sheet) Colonel Sporting Goods is authorized to issue 18,000 shares of common stock. During a two-month period, Colonel completed these stock-issuance transactions:
April 23- Issued 3,000 shares of $1.00 par common stock for cash of $14.50 per share.
April 12 -Received inventory valued at $14,000 and equipment with market value of $44,000 for 3,200 shares of the $1.00 par common stock.
Requirements
1.Prepare the stockholders’ equity section of Colonel Sporting Goods’ balance sheet for the transactions given in this exercise. Retained Earnings has a balance of $48,000. Journal entries are not required.
April 23- Issued 3,000 shares of $1.00 par common stock for cash of $14.50 per share.
April 12 -Received inventory valued at $14,000 and equipment with market value of $44,000 for 3,200 shares of the $1.00 par common stock.
Requirements
1.Prepare the stockholders’ equity section of Colonel Sporting Goods’ balance sheet for the transactions given in this exercise. Retained Earnings has a balance of $48,000. Journal entries are not required.
Explanation / Answer
Working notes:
Calulation of paid in capital in excess of par - common stock
For issue of 3000 shares = ($14.50 - $1.00) x 3000 = $40500
For isuue of 3200 shares = $ 44000 + $14000 - 3200 x $1 = $54800
Paid in Capital $ Common stock $1 par, 18000 authorised 6200 shares issued 6200 Paid in capital in excess of par-common stock 95300 Total Paid in capital 101500 Retained Earnings 48000 Total Stockholder's equity 149500Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.