Question

Oxygen Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its shareholders' equity during its first year of operations. 150,000 125,000 Cash. a. Share Capital Ordinary, $25 Par Value Share Premium-Ordinary 25,000 75,000 b. Organization Expenses 62,500 Share Capital- Ordinary, $25 Par Value Share Premium-Ordinary 12,500 21,500 C. Cash 7,500 Accounts Receivable 30,000 Building Notes Payable Share Capital Ordinary, $25 Par Value Share Premium-Ordinary 19,000 25,000 15,000 d. Cash 60,000 Share Capital-Ordinary, $25 Par Value Share Premium-Ordinary 37,500 22,500 Required 1. Explain the transaction(s) underlying each journal entry (a) through (d). 2. How many ordinary shares are outstanding at year-end? 3. What is the total share capital (contributed capital) at year-end?

Answer 1

	a)	common stock issued for cash
	b)	common stock issued for legal
		expenses
	c)	common stock issued in part for cash,on account
		and in exchange for building
	d)	common stock issued for cash

2)	Number of outstanding shares
	issued in (a)			5,000
	issued in (b)			2,500
	issued in ©			1,000
	issued in (d)			1,500
	total			10,000	answer
4)	total paid in capital from common stockholders
	from transaction (a)			150,000
	From transaction (b)			75,000
	From transaction ©			40,000
	from transaction (d)			60,000
	total paid in capital.			325,000	answer
5)		Book value per common share
	choose numerator		/	Choose denominator			=	book value per CS
	total stocholders			outstanding shares
	equity
	347,500		/	10,000			=	34.75