Question 1 Parker Corporation has issued 1,900 shares of common stock and 380 sh

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Question 1

Parker Corporation has issued 1,900 shares of common stock and 380 shares of preferred stock for a lump sum of $70,000 cash.

(a)

Account Titles and Explanation

Debit

Credit

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(b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Question 1

Parker Corporation has issued 1,900 shares of common stock and 380 shares of preferred stock for a lump sum of $70,000 cash.

(a)

Give the entry for the issuance assuming the par value of the common stock was $5 and the fair value $30, and the par value of the preferred stock was $40 and the fair value $50. (Each valuation is on a per share basis and there are ready markets for each stock.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Attempts: 0 of 2 used

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SUBMIT ANSWER

(b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Explanation / Answer

Cash 70000       Common Stock 9500 =1900*5       Paid-in Capital in Excess of Par—Common Stock 47500 =57000-9500       Preferred Stock 15200 =380*40       Paid-in Capital in Excess of Par—Preferred Stock 2300 =17500-15200 Workings: Common stock fair value 57000 =1900*30 Preferred stock fair value 19000 =380*50 Total 76000 Allocated to :       Common Stock 52500 =70000/76000*57000       Preferred Stock 17500 =70000/76000*19000

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