Question 32 (of 32) value 14.00 points Newly formed S&J; Iron Corporation has 11

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Question 32 (of 32) value 14.00 points Newly formed S&J; Iron Corporation has 113,000 shares of $6 par common stock authorized. On March 1, 2016, S&J; Iron issued 11,000 shares of the stock for $10 per share. On May 2 the company issued an additional 22,000 shares for $20 per share. S&J; Iron was not affected by other events during 2016 Required a. Record the transactions in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event Balance Sheet Assets Liabilities Stockholders' Equity Common Revenue- ExpenseNet Income Cash Flow Event March 1 May 2 PIC in Excess Cash b. Determine the amount S&J; Iron would report for common stock on the December 31, 2016, balance sheet on stock c. Determine the amount S8J Iron would report for paid-in capital in excess of par Paid-in copital inexcess of par d. What is the totel amount of capital contributed by the owners? al paid-in capital

Explanation / Answer

a) Recording of transactions in horizontal statement model (Amount in $)

The par value of common stock is $6 per share which is shown under common stock and issue price in excess of $6 will be shown under paid in capital in excess.

b) Amount reported for common stock on December, 2016 Balance Sheet = $66,000+$132,000 = $198,000

c) Paid in capital in excess of par = $44,000+$308,000 = $352,000

d) Total Paid in capital = Common stock+Paid in capital in excess of par

= $198,000+$352,000 = $550,000

e) Total Assets on December 31, 2016 = Cash = $110,000+$440,000 = $550,000

f) Journal Entries (Amount in $)

Event Assets = Liabilities + Common Stock + PIC in excess Revenue - Expense = Net Income Cash Flow Cash Flow Cash March 1 110,000 = NA + 66,000 + 44,000 NA - NA = NA 110,000 FA May 2 440,000 = NA + 132,000 + 308,000 NA - NA = NA 440,000 FA

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