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

ID: 2595800 • Letter: K

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 $783,000?

General Journal Debit Credit a. Cash 270,000 Common Stock, $25 Par Value 240,000 Paid-In Capital in Excess of Par Value, Common Stock 30,000 b. Organization Expenses 200,000 Common Stock, $25 Par Value 127,000 Paid-In Capital in Excess of Par Value, Common Stock 73,000 c. Cash 45,000 Accounts Receivable 15,500 Building 81,500 Notes Payable 59,800 Common Stock, $25 Par Value 52,200 Paid-In Capital in Excess of Par Value, Common Stock 30,000 d. Cash 135,000 Common Stock, $25 Par Value 77,000 Paid-In Capital in Excess of Par Value, Common Stock 58,000

Explanation / Answer

Answer:

2.

shares of common stock are outstanding at year-end

Issued in

Issued

amount

Devided
by $25

Number of
shares

A

B

A/B

a.

Common Stock, $25 Par Value

240,000

25

9600

b.

Common Stock, $25 Par Value

127,000

25

5080

c.

Common Stock, $25 Par Value

52,200

25

2088

D

Common Stock, $25 Par Value

77,000

25

3080

Total shared

19848

shares of common stock are outstanding at year-end=19,848

_____________________________________________________________________

3.

The amount of minimum legal capital (based on par value) at year-end

minimum legal capital (based on par value) at year-end

=Out standing share x par value of share

=19,848 x $ 25

=$ 496,200

____________________________________________________________________

4.

the total paid-in capital at year-end

General Journal

Amount

a.

Common Stock, $25 Par Value

240,000

Paid-In Capital in Excess of Par Value, Common Stock

30,000

b.

Common Stock, $25 Par Value

127,000

Paid-In Capital in Excess of Par Value, Common Stock

73,000

c.

Common Stock, $25 Par Value

52,200

Paid-In Capital in Excess of Par Value, Common Stock

30,000

d.

Common Stock, $25 Par Value

77,000

Paid-In Capital in Excess of Par Value, Common Stock

58,000

total paid in capital

687,200

total paid in capital

687,200

_______________________________________________________

5.

The book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $783,000

Book value

= total paid-in capital plus retained earnings equals / number of share outstanding

=783000/ 19848

=$39.45

The book value per share of the common stock at year-end =$39.45

Issued in

Issued

amount

Devided
by $25

Number of
shares

A

B

A/B

a.

Common Stock, $25 Par Value

240,000

25

9600

b.

Common Stock, $25 Par Value

127,000

25

5080

c.

Common Stock, $25 Par Value

52,200

25

2088

D

Common Stock, $25 Par Value

77,000

25

3080

Total shared

19848