Problem 11-1A Stockholders\' equity transactions and analysis LO C2, P1 Kinkaid
ID: 2481005 • Letter: P
Question
Problem 11-1A Stockholders' equity transactions and analysis LO C2, P1
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.
What is the amount of minimum legal capital (based on par value) at year-end?
What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $695,000?
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.
Explanation / Answer
2. No. of Shares outstanding = (250,000 + 125,000 + 50,000 + 75,000) / 25 = 20,000
3. Legal Capital = 20,000 * $25 = $500,000
4. Paid in capital = 50,000 + 25,000 + 30,000 + 45,000 = $150,000
5. Book Value per Share = ((20000*25) + 695,000) / 20,000 = $59.75