Question

Axle Corporation recently organized. The company issued common stock to an inventor in exchange for a patent with a market value of $59,000. In addition, Axle received cash for 7,000 shares of its $20 par preferred stock at par value and 7,500 shares of its no-par common stock at $45 per share. Without making journal entries, determine the total paid-in capital created by these transactions. The total paid-in capital created by these transactions amounts to $

Answer 1

Calculation of the Total Paid-in capital

Exchange for patent	$59000
Add: Issuance of preferred stock (7000*$20)	140000
Add: Issuance of common stock (7500*$45)	337500
Total paid-in capital	$536500

1-a)

Date	Account titles and explanation	Debit	Credit
a.	Cash (1000*$14)	$14000
	Common stock- No par value		$14000
	(To record common stock issued)
b.	Cash (1000*$14)	$14000
	Common stock (1000*$4)		$4000
	Paid-in capital in excess of stated value- Common stock (14000-4000)		$10000
	(To record common stock issued)

2) In both of the method the paid-in capital is equal.

1)

Date	Account titles and explanation	Debit	Credit
Sep 6	Cash	$7500
	Common stock (250*$1)		$250
	Paid-in capital in excess of par- Common stock (7500-250)		$7250
	(To record common stock issued)
Sep 12	Cash	$24000
	Preferred stock- No par value		$24000
	(To record preferred stock issued)
Sep 14	Land	$19000
	Common stock (1700*$1)		$1700
	Paid-in capital in excess of par- Common stock (19000-1700)		$17300
	(To record common stock issued)

2)

KCAS-TV
Balance Sheet
September 30, 2018
Paid-in Capital:
Preferred stock- $7, No par value,100000 shares authorized, 500 shares issued and outstanding	$24000
Common stock- $1 par value, 500000 shares authorized, 1950 shares issued and outstanding	1950
Paid-in capital in excess of par- Common stock	24550
Total paid-in capital	50500
Retained earnings	39000
Total stockholders' equity	$89500

Common stock= $250+1700= $1950

Paid-in capital in excess of par- Common stock= $7250+17300= $24550