Melvina Corporation has been authorized to issue 22,800 shares of $100 par value

Question

Melvina Corporation has been authorized to issue 22,800 shares of $100 par value, 8% noncumulative preferred stock and 1,025,800 shares of no-par common stock. The corporation assigned a $4 stated value to the common stock. At December 31, 2012, the ledger contained the following balances pertaining to stockholders' equity. The preferred stock was issued for $182,680 cash. All common stock issued was for cash. In November 4,810 shares of common stock were purchased for the treasury at a per share cost of $9. No dividends were declared in 2012.

Explanation / Answer

1 Particulars Debit Credit Cash 182680 Preferred Stock 162200 Paid in capital in excess of Par- Preferred Stock (182680-162200) 20480 2 Particulars Debit Credit Cash 3640000 Common Stock 2010000 Paid in capital in excess of Par- Common Stock (182680-162200) 1630000 3 Particulars Debit Credit Treasury Stock: (4810*4) 19240 Additional Paid in Capital 4810*(9-4) 24050 Cash: (4810*9) 43290

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