Question

Novak Corp. was organized on January 1, 2017, It is authorized to issue 24,000 shares of 5%, $53 par value preferred stock and 460,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 70,000 shares of common stock for cash at $4 per share. Mar, Issued 1,200 shares of preferred stock for cash at $54 per share. May Issued 115,000 shares of common stock for cash at $6 per share. Sept. Issued 5,000 shares of common stock for cash at $7 per share. Nov. 1 Issued 3,000 shares of preferred stock for cash at $58 per share. Prepare a tabular summary to record the transactions. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets Liabilities Stockholders Equity Paid-in-Capital Retained Earnings PIC in Excess PIC in Excess + of Par Value + + Common of Stated+ Cash Stock Value Com. Pref. Stock Revenue Expense Dividend Jan. 10 Mar, 1 May 1 Sept. 1 Nov. 1 Total VI O: SEMILAR PROBLEM VIDEO SIMILAR PROBLEM

Answer 1

Formula sheet

For no par stocks with stated value, Common Stock Account Paid in capital in excess of par Number of shares Amount in excess of stated value 4 -Common Stock Accounttated Value per share Stated Value of Common Stock $1 Par Value of preferred stock Date Number of Shares Issued Issue Price 10-Jan 12 1200 1-Se 15 1-Nov 17Journal entry for transactions will be as follows: Account titles & explanation Debit Credit 10-an Cash (70,000 $4 $280,000.00 Common Stock (70,000 $1 Paid in capital in excess of stated Value Common 70,000.00 21 $210,000.00 23 1-Mar Cash (1,200 $54) $64,800.00 $63,600.00 Preferred Stock (1,200 $53 Paid in capital in excess of ar - Preferred Stock 1,200.00 1-May Cash (115,000 $6 $690,000.00 Common Stock (115,000 $1 Paid in capital in excess of stated Value - Common 115,000.00 $575,000.00 1-Sep Cash (5,000 $7) $35,000.00 $5,000.00 Common Paid in capital in excess of stated Value Common $30,000.00 1-Nov Cash (3,000 $58) $174,000.00 Preferred Stock (3,000 $53 Paid in capital in excess of par Preferred Stock $161,200.00 $12,800.00 Date Liabilities Stockholders' Equi CommonPIC in excess of Stock PIC in excess Cash Stated Value Com Pref. Stock of pref. stock Revenue Expense Dividend 10-Jan $280,000.00 $64,800.00 $690,000.00 $35,000.00 $174,000.00 $1,243,800.00 $70,000.00 $210,000.00 42 1-Mar $63,600.00 $1,200.00 43 115,000.00 $5,000.00 $575,000.00 $30,000.00 1-Sep 1-Nov $161,200.00 $12,800.00 Total 0.00 $0.00$190,000.00 $815,000.00 $224,800.00 $14,000.00 0.00 $0.00 $0.00 Partial Balance Sheet Paid in capital portion of Stockholder's Equit Paid in capital Common Stock Preferred Stock Total Capital Stock Additional Paid in Capital In Excess of Par Value Preferred Stock In excess of stated Value Common Stock $190,000.00 $224,800.00 $414,800.00 14,000.00 $815,000.00 $829,000.00 $1,243,800.00 Total additional paid in capital Total Paid in Capital

A	B	C	D	E	F	G	H	I	J	K	L	M	N
2
3		For no par stocks with stated value,
4		Common Stock Account	=Common Stock Account*Stated Value per share
5		Paid in capital in excess of par	=Number of shares*Amount in excess of stated value
6
7		Stated Value of Common Stock	1
8		Par Value of preferred stock	53
9
10		Date	Number of Shares Issued	Issue Price
11		43110	70000	4
12		43160	1200	54
13		43221	115000	6
14		43344	5000	7
15		43405	3000	58
16
17		Journal entry for transactions will be as follows:
18		Date	Account titles & explanation	Debit	Credit
19		43110	Cash (70,000*$4)	=D11*E11
20			Common Stock (70,000*$1)		=D11*D7
21			Paid in capital in excess of stated Value - Common Stock (70,500*($6-$1))		=E19-F20
22
23		43160	Cash (1,200*$54)	=D12*E12
24			Preferred Stock (1,200*$53)		=D12*D8
25			Paid in capital in excess of par - Preferred Stock		=E23-F24
26
27		43221	Cash (115,000*$6)	=D13*E13
28			Common Stock (115,000*$1)		=D13*D7
29			Paid in capital in excess of stated Value - Common Stock		=E27-F28
30
31		43344	Cash (5,000*$7)	=D14*E14
32			Common Stock (5,000*$7)		=D14*D7
33			Paid in capital in excess of stated Value - Common Stock		=E31-F32
34
35		43405	Cash (3,000*$58)	=D15*E15
36			Preferred Stock (3,000*$53)		=3100*52
37			Paid in capital in excess of par - Preferred Stock		=E35-F36
38
39		Date	Assets=	Liabilities	+	Stockholders' Equity
40			Cash			Common Stock	PIC in excess of Stated Value Com	Pref. Stock	PIC in excess of pref. stock	Revenue	Expense	Dividend
41		43110	=E19			=F20	=F21
42		43160	=E23					=F24	=F25
43		43221	=E27			=F28	=F29
44		43344	=E31			=F32	=F33
45		43405	=E35					=F36	=F37
46		Total	=SUM(D41:D45)	=SUM(E41:E45)	=SUM(F41:F45)	=SUM(G41:G45)	=SUM(H41:H45)	=SUM(I41:I45)	=SUM(J41:J45)	=SUM(K41:K45)	=SUM(L41:L45)	=SUM(M41:M45)
47
48		Partial Balance Sheet
49		Paid in capital portion of Stockholder's Equity
50		Paid in capital
51		Common Stock	=G46
52		Preferred Stock	=I46
53		Total Capital Stock		=D51+D52
54		Additional Paid in Capital
55		In Excess of Par Value - Preferred Stock	=J46
56		In excess of stated Value - Common Stock	=H46
57		Total additional paid in capital		=D55+D56
58		Total Paid in Capital		=E53+E57
59