On October 31, Legacy Rocks Inc., a marble contractor, issued for cash 79,500 sh

Question

On October 31, Legacy Rocks Inc., a marble contractor, issued for cash 79,500 shares of $10 par common stock

The stock outstanding when a corporation has issued only one class of stock.

at $11, and on November 19, it issued for cash 19,070 shares of preferred stock

A class of stock with preferential rights over common stock.

, $45 par at $56.

Required:

What is the total amount invested (total paid-in capital) by all stockholders as of November 19?

CHART OF ACCOUNTS Legacy Rocks Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest Expense

Explanation / Answer

A) Journal Entries are shown as follows:-

Legacy Rocks Inc.

Journal Entries (Amounts in $)

B) Total paid in capital on November 19 is composed of Common Stock and Preferred Stock.

Paid in capital = Common Stock+Preferred Stock

= $795,000+$858,150 = $1,653,150

Date Account Titles Debit Credit Oct. 31 Cash (79,500 shares*$11 per share) 874,500 Common Stock (79,500*$10 par) 795,000 Paid-In Capital in Excess of Par-Common Stock (79,500*$1) 79,500 (To record the issue of Common stock) Nov. 19 Cash (19,070 shares*$56) 1,067,920 Preferred Stock (19,070*$45 par) 858,150 Paid-In Capital in Excess of Par-Preferred Stock [($56-$45)*19,070] 209,770 (To record the issue of Preferred stock)

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