Question

Stockholders' Equity: Transactions and Balance Sheet Presentation Torey Corporation was organized on April 1, with an authorization of 25,000 shares of six percent, $50 par value preferred stock and 200,000 shares of $5 par value common stock. During April, the following transactions affecting stockholders' equity occurred: Apr. 1 Issued 80,000 shares of common stock at $40 cash per share. 3 Issued 2,000 shares of common stock to attorneys and promoters in exchange for their services in organizing the corporation. The services were valued at $31,000. 8 Issued 3,000 shares of common stock in exchange for equipment with a fair market value of $55,000. 20 Issued 6,000 shares of preferred stock for cash at $80 per share.

Answer 1

Answer

• Requirement [b]

Stockholder's Equity
Paid in Capital
Preferred Stock [6000 shares x $ 50 par]	$300,000
Common Stock [(80000+2000+3000) shares x $ 5 par]	$425,000	$725,000
Additional Paid in Capital
Paid in Capital in excess of par - Preferred Stock (6000 shares x $ 30)	$180,000
Paid in Capital in excess of par - Common Stock	$2,861,000	$3,041,000
Total Paid in Capital		$3,766,000
Retained earnings		$60,000
Total Stockholde’rs Equity		$3,826,000