Problem 11-1A (Part Level Submission) whispering winds Corp. was organized on Ja
ID: 2560240 • Letter: P
Question
Problem 11-1A (Part Level Submission) whispering winds Corp. was organized on January 1, 2017, It is authorized to issue 21,800 shares of 796, $51 par value preferred stock and 466,000 shares of no-par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year Jan. 10 Mar. 1 May 1 Sept. 1 Nov. 1 Issued 73,000 shares of common stock for cash at $6 per share Issued 1,260 shares of preferred stock for cash at $56 per share Issued 118,000 shares of common stock for cash at $6 per share. Issued 5,600 shares of common stock for cash at $7 per share Issued 3,600 shares of preferred stock for cash at $54 per shareExplanation / Answer
Stock is no par with a stated value.
From an accounting standpoint, stated value is treated the same way as par value
Stock is no par with a stated value.
From an accounting standpoint, stated value is treated the same way as par value
Accounts Title & Explanation Dr Cr Jan-10 Cash (73000 shares x $6) 438000 Common Stock (73000 shares x $3) 219000 Add’l Paid in Capital (438000-219000) 219000 Mar-01 Cash (1260 shares x $56) 70560 7% Prefered Stock (1260 shares x $51) 64260 Add’l Paid in Capital ( 70560-64260) 6300 May-01 Cash (118000 shares x $6) 708000 Common Stock (118000 shares x $3) 354000 Add’l Paid in Capital (708000-354000) 354000 Sep-01 Cash (5600 shares x $7) 39200 Common Stock (5600 shares x $3) 16800 Add’l Paid in Capital (39200-16800) 22400 Nov-01 Cash (3600 shares x $54) 194400 7% Prefered Stock (3600 shares x $51) 183600 Add’l Paid in Capital (194400-183600) 10800