Kinkaid c0 is incorporated at the beginning of this year and engages in a number
ID: 2496624 • Letter: K
Question
Kinkaid c0 is incorporated at the beginning of this year and engages in a number of transactions following journal entries impacted its stock holders equality during its first year of operations Explain the transactions(s) underlying each journal entry (a) through (d). how many shares of common stock arc outstanding at year-end ' What is the amount of minimum legal capital (based on par value) at year-end? What is the total paid-in capital at year-end What is the book value per share of the common stock at year-end if total paid-in capital plus earnings equals $695,000?Explanation / Answer
1.
a. The company has issued 10000 shares to the public of face value $25 for $30 each.
b. The company has incurred capital expenditure in the name of organisation expenses and has issued 10000 shares of face value $25 for $50 each in consideration of the payment for expenses incurred.
c. The company has purchased cash, accounts receivable and building and acquired the liability of notes payable. The company has in consideration of this acquisition issued 2000 shares of face value $25 for $40 each.
d. The company has issued 3000 shares to the public of face value $25 for $40 each.
2. No. of shares outstanding at year end = 10000+10000+2000+3000 = 25000 shares.
3. The amount of total minimum legal capital at year end = 25000*25 = $625000
4. Total Paid in capital at year end = 50000+25000+30000+45000 = $150000
5. Book Value per share = 695000/ 25000 = $27.80
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