Question

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	280,000
	Common Stock, $25 Par Value		240,000
	Paid-In Capital in Excess of Par Value, Common Stock		40,000
b.	Organization Expenses	180,000
	Common Stock, $25 Par Value		127,000
	Paid-In Capital in Excess of Par Value, Common Stock		53,000
c.	Cash	44,500
	Accounts Receivable	17,000
	Building	82,200
	Notes Payable		59,900
	Common Stock, $25 Par Value		53,800
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	128,000
	Common Stock, $25 Par Value		75,000
	Paid-In Capital in Excess of Par Value, Common Stock		53,000

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 $786,000?

Answer 1

2)	Number of outstanding shares
	issued in (a)			9,600
	issued in (b)			5,080
	issued in ©			2,152
	issued in (d)			3,000
	total			19,832	answer
3)	minimum legal capital = outstanding shares*par value per share
			19832*25
			495800	answer
4)	total paid in capital from common stockholders
	from transaction (a)			280,000
	From transaction (b)			180,000
	From transaction ©			83,800
	from transaction (d)			128,000
	total paid in capital.			671,800	answer
5)		Book value per common share
	choose numerator		/	Choose denominator			=	book value per CS
	total stocholders			outstanding shares
	equity
	786,000		/	19,832			=	39.63