Newly formed S&J Iron Corporation has 198,000 shares of $5 par common stock auth
ID: 2588767 • Letter: N
Question
Newly formed S&J Iron Corporation has 198,000 shares of $5 par common stock authorized. On March 1, 2016, S&J Iron issued 11,000 shares of the stock for $11 per share. On May 2 the company issued an additional 22,500 shares for $21 per share. S&J Iron was not affected by other events during 2016.
Record the transactions in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event.
Determine the amount S&J Iron would report for common stock on the December 31, 2016, balance sheet.
Determine the amount S&J Iron would report for paid-in capital in excess of par.
What is the total amount of capital contributed by the owners?
What amount of total assets would S&J Iron report on the December 31, 2016, balance sheet?
Prepare journal entries to record the March 1 and May 2 transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field)
Newly formed S&J Iron Corporation has 198,000 shares of $5 par common stock authorized. On March 1, 2016, S&J Iron issued 11,000 shares of the stock for $11 per share. On May 2 the company issued an additional 22,500 shares for $21 per share. S&J Iron was not affected by other events during 2016.
Explanation / Answer
Answer
Date
Journal Entry
Dr
Cr
Working
01-Mar
Cash
121000
11000 x 11
Common Stock (@$5)
55000
11000 x 5
Paid up in excess of Par (@$6)
66000
11000 x 6
02-May
Cash
472500
22500 x 21
Common Stock (@$5)
112500
22500 x 5
Paid up in excess of Par (@$16)
360000
22500 x 16
Shareholder's Equity & liabilities
Amount
Assets
Amount
Shareholder's Equity:
Current Assets:
Common Stock
167500
Cash
593500
Paid up in excess of par
426000
Total
593500
Total
593500
Shareholder's Equity
Current Assets
Date
Journal Entry
Dr
Cr
Common Stock
paid up in excess of Par
Cash
01-Mar
Cash
121000
121000
Common Stock (@$5)
55000
55000
Paid up in excess of Par (@$6)
66000
66000
02-May
Cash
472500
472500
Common Stock (@$5)
112500
112500
Paid up in excess of Par (@$16)
360000
360000
TOTAL
167500
426000
593500
Answers on the basis of above workings
Date
Journal Entry
Dr
Cr
Working
01-Mar
Cash
121000
11000 x 11
Common Stock (@$5)
55000
11000 x 5
Paid up in excess of Par (@$6)
66000
11000 x 6
02-May
Cash
472500
22500 x 21
Common Stock (@$5)
112500
22500 x 5
Paid up in excess of Par (@$16)
360000
22500 x 16