Question

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Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders' equity during its first year of operations. Credit Debit 290,000 General Journal Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 230,000 60,000 b. 150,000 Organization Expenses Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 127,000 23,000 44,500 17,000 82,300 Cash Accounts Receivable Building Notes Payable Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 60,000 53,800 30,000 d. 130,000 Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock 79,000 51.000 Required: 2. How many shares of common stock are outstanding at year-end? 3. What is the amount of minimum legal capital (based on par value) at year-end? 4. What is the total paid-in capital at year-end? 5. 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

Answer: Number of outstanding shares: Issued in (a) Issued in (b) Issued in (c) Issued in (d) Total 9200 5080 2152 3160 19592 Minimum legal capital = Outstanding shares x Par value per share = 19,592 x $25 = $489,800 Total paid-in capital from common stockholders: Amount($) From transaction (a) 290,000 From transaction (b) 150,000 From transaction (c) 83,800 From transaction (d) 130,000 Total paid-in capital 653,800 Book value per common share: Total stockholders' equity (given) Outstanding shares (from Part 2) Book value per common share Amount($) 795,000 19,592 $ 40.58 ($795,000 / 19,592 shares)