Problem 11-1A Stockholders\' equity transactions and analysis LO C2, P1 Kinkaid

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.

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 $796,000?

General Journal Debit Credit a. Cash 290,000 Common Stock, $25 Par Value 230,000 Paid-In Capital in Excess of Par Value, Common Stock 60,000 b. Organization Expenses 150,000 Common Stock, $25 Par Value 128,000 Paid-In Capital in Excess of Par Value, Common Stock 22,000 c. Cash 44,500 Accounts Receivable 17,500 Building 82,100 Notes Payable 59,600 Common Stock, $25 Par Value 54,500 Paid-In Capital in Excess of Par Value, Common Stock 30,000 d. Cash 123,000 Common Stock, $25 Par Value 78,000 Paid-In Capital in Excess of Par Value, Common Stock 45,000

Explanation / Answer

2 Shares of common stock outstanding=(230000+128000+54500+78000)/25= 19620 3 Amount of minimum legal capital = 19620*25= $490500 4 Total paid-in capital=490500+(60000+22000+30000+45000)= $647500 5 Book value per share =796000/19620= $40.57

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