Kinkaid Co. is incorporated at the beginning of this year and engages in a numbe
ID: 2595800 • Letter: K
Question
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 first year of operations.
Required:
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 $783,000?
General Journal Debit Credit a. Cash 270,000 Common Stock, $25 Par Value 240,000 Paid-In Capital in Excess of Par Value, Common Stock 30,000 b. Organization Expenses 200,000 Common Stock, $25 Par Value 127,000 Paid-In Capital in Excess of Par Value, Common Stock 73,000 c. Cash 45,000 Accounts Receivable 15,500 Building 81,500 Notes Payable 59,800 Common Stock, $25 Par Value 52,200 Paid-In Capital in Excess of Par Value, Common Stock 30,000 d. Cash 135,000 Common Stock, $25 Par Value 77,000 Paid-In Capital in Excess of Par Value, Common Stock 58,000Explanation / Answer
Answer:
2.
shares of common stock are outstanding at year-end
Issued in
Issued
amount
Devided
by $25
Number of
shares
A
B
A/B
a.
Common Stock, $25 Par Value
240,000
25
9600
b.
Common Stock, $25 Par Value
127,000
25
5080
c.
Common Stock, $25 Par Value
52,200
25
2088
D
Common Stock, $25 Par Value
77,000
25
3080
Total shared
19848
shares of common stock are outstanding at year-end=19,848
_____________________________________________________________________
3.
The amount of minimum legal capital (based on par value) at year-end
minimum legal capital (based on par value) at year-end
=Out standing share x par value of share
=19,848 x $ 25
=$ 496,200
____________________________________________________________________
4.
the total paid-in capital at year-end
General Journal
Amount
a.
Common Stock, $25 Par Value
240,000
Paid-In Capital in Excess of Par Value, Common Stock
30,000
b.
Common Stock, $25 Par Value
127,000
Paid-In Capital in Excess of Par Value, Common Stock
73,000
c.
Common Stock, $25 Par Value
52,200
Paid-In Capital in Excess of Par Value, Common Stock
30,000
d.
Common Stock, $25 Par Value
77,000
Paid-In Capital in Excess of Par Value, Common Stock
58,000
total paid in capital
687,200
total paid in capital
687,200
_______________________________________________________
5.
The book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $783,000
Book value
= total paid-in capital plus retained earnings equals / number of share outstanding
=783000/ 19848
=$39.45
The book value per share of the common stock at year-end =$39.45
Issued in
Issued
amount
Devided
by $25
Number of
shares
A
B
A/B
a.
Common Stock, $25 Par Value
240,000
25
9600
b.
Common Stock, $25 Par Value
127,000
25
5080
c.
Common Stock, $25 Par Value
52,200
25
2088
D
Common Stock, $25 Par Value
77,000
25
3080
Total shared
19848
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