Question

Problem 13-1A 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.

	General Journal	Debit	Credit
a.	Cash	300,000
	Common Stock, $25 Par Value		250,000
	Paid-In Capital in Excess of Par Value, Common Stock		50,000
b.	Organization Expenses	150,000
	Common Stock, $25 Par Value		125,000
	Paid-In Capital in Excess of Par Value, Common Stock		25,000
c.	Cash	43,000
	Accounts Receivable	15,000
	Building	81,500
	Notes Payable		59,500
	Common Stock, $25 Par Value		50,000
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	120,000
	Common Stock, $25 Par Value		75,000
	Paid-In Capital in Excess of Par Value, Common Stock		45,000

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 $695,000?

How many shares of common stock are outstanding at year-end? What is the amount of minimum legal capital (based on par value) at year-end? What is the total paid-in capital at year-end?

	2. Number of outstanding shares 20,000 3. Minimum legal capital $500,000 4. Total paid-in capital

Answer 1

2
Number of outsanding shares	20000	=(250000+125000+50000+75000)/25
3
Minimum legal capital	500000	=20000*25
4
Total paid-in Capital	650000	=500000+50000+25000+30000+45000
5
Book value per common share
Choose Numerator	/	Choose Denominator	=	Book value per common share
Stockholders' Equity applicable to Common shares	/	Number of common shares outstanding	=	Book value per common share
695000	/	20000	=	34.75