Kinkaid Co. is incorporated at the beginning of this year and engages in a numbe

Question

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.

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 $796,000?

General Journal Debit Credit a. Cash 290,000 Common Stock, $25 Par Value 230,000 Paid-In Capital in Excess of Par Value, Common Stock 60,000 b. Organization Expenses 150,000 Common Stock, $25 Par Value 128,000 Paid-In Capital in Excess of Par Value, Common Stock 22,000 c. Cash 44,500 Accounts Receivable 17,500 Building 82,100 Notes Payable 59,600 Common Stock, $25 Par Value 54,500 Paid-In Capital in Excess of Par Value, Common Stock 30,000 d. Cash 123,000 Common Stock, $25 Par Value 78,000 Paid-In Capital in Excess of Par Value, Common Stock 45,000

Explanation / Answer

2) Number of outstanding shares issued in (a) 9,200 issued in (b) 5,120 issued in © 2,180 issued in (d) 3,120 total 19,620 answer 3) minimum legal capital = outstanding shares*par value per share 19620*25 490500 answer 4) total paid in capital from common stockholders from transaction (a) 290,000 From transaction (b) 150,000 From transaction © 74,500 from transaction (d) 123,000 total paid in capital. 637,500 answer 5)                        Book value per common share choose numerator / Choose denominator = book value per CS total stocholders outstanding shares equity 796,000 / 19,620 = 40.57

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