Question

D. Duck Company was authorized to issue 100,000 shares of $6-par value common stock and 80,000 shares of $90-par value preferred stock. Give the general journal entry required in the attached workpaper to record the issue of 50,000 shares of common stock for $18 per share cash.

Answer 1

Ans 1 Sr.No Credit [50000 x $18] $3,00,000 (50000 x $6] $6,00,000 [50000 x $12] [80000 x $100] $72,00,000 [80000 x $90] $8,00,000 [80000 x $10] Account Title Debit Cash $9,00,000 Common Stock Paid in Capital in excess of par - Common Stock (To record issue of common stock) Cash $80,00,000 Preferred Stock Paid in Capital in excess of par - Preferred Stock (To record issue of preferred stock) Cash $4,00,000 Common Stock Paid in Capital in excess of par - Common Stock (To record issue of common stock) Land $95,000 Common Stock Paid in Capital in excess of par - Common Stock (To record issue of common stock in exchange of land) [20000 x $20] $1,20,000 [20000 x $6] $2,80,000 [20000 x $14] 4 [5000 x $19] $30,000 (5000 x $6] $65,000 [5000 x $13] Ans 2 Ans 3 Ans 4 Common Shares outstanding (50000+20000+5000) = 75000 Preferred Shares outstanding 80000 Total Legal Capital Authorised to issue 100000 common shares of Par $6 Authorised to issue 80000 Preferred shares of Par $90 Total Legal Capital $6,00,000 (100000 x $6] $72,00,000 [80000 x $90] $78,00,000 Ans 5 Total Paid in Capital Common Stock Preferred Stock Paid in Capital in excess of par - Common Stock Paid in Capital in excess of par - Preferred Stock Total Paid in Capital $4,50,000 $72,00,000 $9,45,000 $8,00,000 $93,95,000