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	270,000
	Common Stock, $25 Par Value		235,000
	Paid-In Capital in Excess of Par Value, Common Stock		35,000
b.	Organization Expenses	200,000
	Common Stock, $25 Par Value		127,000
	Paid-In Capital in Excess of Par Value, Common Stock		73,000
c.	Cash	44,500
	Accounts Receivable	15,500
	Building	81,800
	Notes Payable		59,800
	Common Stock, $25 Par Value		52,000
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	148,000
	Common Stock, $25 Par Value		76,000
	Paid-In Capital in Excess of Par Value, Common Stock		72,000

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 $782,000?

Answer 1

2
Shares of common stock	19600	=(235000+127000+52000+76000)/25
3
Amount of minimum legal capital	490000	=19600*25
4
Total paid-in capital	700000	=490000+35000+73000+30000+72000
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
782000	/	19600	=	39.90