statement of cash flows for Astro Corporation\'s 2016 fiscal year Exercise 11-4A
ID: 2560300 • Letter: S
Question
statement of cash flows for Astro Corporation's 2016 fiscal year Exercise 11-4A Effect of issuing common stock on the balance sheet Newly formed S&J; Iron Corporation has 50,000 shares of $10 par common stoc On March 1, 2016, S&J; Iron issued 6,000 shares of the stock for $16 per share. company issued an additional 10,000 shares for S18 per share. S&J; Iron was not a other events during 2016. On May 2 the Required a. Record the transactions in a horizontal statements model like the following one. Flow column, indicate whether the item is an operating activity (OA), investing or financing activity (FA). Use NA to indicate that an element was not affected by In the Cash Assets = Liab. + Equity Rev.- Exp. = Net Inc. | Cash Flow Cash = Com. Stk. PIC in ExcessExplanation / Answer
a.
276000=160000+116000
(Cash)=(Common Stock)+(PIC in Excess)
Common Stock= 6,000*10+10,000*10=$1,60,000
PIC in Excess= 6,000*6+10,000*8=$1,16,000.
b. The amount to be reported as common stock as on 31 Dec, 2016 would be $1,60,000. As common stock is always calculated using the par value of the stock. In the question it is given as $10.
Common Stock= 6,000*10+10,000*10=$1,60,000.
c. The amount to be reported for paid in capital in excess of par is $1,16,000. Paid in Capital in excess of par is the difference between the fair market value paid for the stock and stock's par value., i.e ($16-$10)= $6*6,000=$36,000 on March,1 and ($18-$10)=$8*10,000=$80,000.
d. the total amount of capital contributed by the owners are $1,60,000.
e. the total amount of assets reported on the balancesheet date as on 31st,dec, 2016 would be the total amount received on issuing the shares i.e.$2,76,000.
f.
Cash A/c Dr. $96,000
To Common Stock A/c $60,000
To PIC in excess of par A/c $36,000
(Being shares issued & alloted)
Cash A/c Dr. $1,80,000
To Common Stock A/c $1,00,000
To PIC in excess of par A/c $18,000
(Being shares issued & alloted)
Assets= Liabities + Equity Revenue-Expenses=Net Income Cash Flow
276000=160000+116000
(Cash)=(Common Stock)+(PIC in Excess)
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