The following accounts and their balances were selected from the unadjusted tria
ID: 2515101 • Letter: T
Question
The following accounts and their balances were selected from the unadjusted trial balance of Point Loma Group Inc., a freight forwarder, at October 31, the end of the current fiscal year:
1
Common Stock, no par, $14 stated value
$4,480,000.00
2
Paid-In Capital from Sale of Treasury Stock
45,000.00
3
Paid-In Capital in Excess of Par-Preferred Stock
210,000.00
4
Paid-In Capital in Excess of Stated Value-Common Stock
480,000.00
5
Preferred 2% Stock, $120 par
8,400,000.00
6
Retained Earnings
39,500,000.00
Prepare the Paid-In Capital portion of the Stockholders’ Equity section of the balance sheet using Method 1 of
Exhibit 7
. There are 375,000 shares of common stock authorized and 85,000 shares of preferred stock authorized. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
X
Amount Descriptions
1
Common Stock, no par, $14 stated value
$4,480,000.00
2
Paid-In Capital from Sale of Treasury Stock
45,000.00
3
Paid-In Capital in Excess of Par-Preferred Stock
210,000.00
4
Paid-In Capital in Excess of Stated Value-Common Stock
480,000.00
5
Preferred 2% Stock, $120 par
8,400,000.00
6
Retained Earnings
39,500,000.00
Explanation / Answer
Preferred Shares issued = Preferred 2% Stock/Par Value
= $8,400,000/$120 = 70,000 shares
Common Stock issued = Common Stock/Stated Value
= $4,480,000/$14 = 320,000 shares
Point Loma Group Inc.
Partial Balance Sheet as on October 31 (Amounts in $)
Stockholder's Equity Paid-in Capital Capital Stock 2% Preferred Stock, $120 par value, 85,000 shares authorized and 70,000 shares issued 8,400,000 Common Stock, no par, $14 stated value, 375,000 shares authorized and 320,000 shares issued 4,480,000 Total Capital Stock 12,880,000 Additional Paid-in Capital Paid-In Capital in Excess of Par-Preferred Stock 210,000 Paid-In Capital in Excess of Stated Value-Common Stock 480,000 Total additional paid-in capital 690,000 Total Paid-in Capital 13,570,000