Question

Kinkaid Co. was incorporated at the beginning of this year and had 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	160,000
	Common Stock, $25 Par Value		128,000
	Paid-In Capital in Excess of Par Value, Common Stock		32,000
c.	Cash	45,000
	Accounts Receivable	19,000
	Building	82,700
	Notes Payable		59,600
	Common Stock, $25 Par Value		57,100
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	123,000
	Common Stock, $25 Par Value		80,000
	Paid-In Capital in Excess of Par Value, Common Stock		43,000

Required:
2. How many shares of common stock are outstanding at year-end?
3. What is the total paid-in capital at year-end?
4. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $795,000?

Answer 1

Solution 2:

Outstanding common shares = total value of common stock / par value per share

= (240000+128000+57100+80000) / $25 = 20,204

Solution 3:

Total paid in capital = total common stock + total paid in capital in excess of par

= (240000+128000+57100+80000) + (40000+32000+30000+43000) = $650,100

Solution 4:

Book value per share = total paid in capital plus retained earnings / outstanding shares

= $795000/ 20204 = $39.35 per share