Question

Sheffield Corporation was organized on January 1, 2020. It is authorized to issue 11,000 shares of 8%, $100 par value preferred stock, and 520,000 shares of no-par common stock with a stated value of $3 per share. The following stock transactions were completed during the first year.

Jan.	10		Issued 75,500 shares of common stock for cash at $6 per share.
Mar.	1		Issued 5,500 shares of preferred stock for cash at $110 per share.
Apr.	1		Issued 22,500 shares of common stock for land. The asking price of the land was $85,500. The fair value of the land was $80,000.
May	1		Issued 81,500 shares of common stock for cash at $4.25 per share.
Aug.	1		Issued 11,500 shares of common stock to attorneys in payment of their bill of $39,500 for services performed in helping the company organize.
Sept.	1		Issued 12,000 shares of common stock for cash at $6 per share.
Nov.	1		Issued 2,000 shares of preferred stock for cash at $110 per share.

a) Journalize the transactions

b) Post to the stockholders’ equity accounts.

c) Prepare the paid-in capital section of stockholders’ equity at December 31, 2020.

Answer 1

a.

Date	Account Titles	Debit	Credit
Jan-10	Cash	$            4,53,000
	Common Stock		$          2,26,500
	Paid in Capital in excess of Stated Value - Common Stock		$          2,26,500
Mar-01	Cash	$            6,05,000
	Preferred Stock		$          5,50,000
	Paid in Capital in excess of Par Value - Preferred Stock		$             55,000
Apr-01	Land	$                80,000
	Common Stock		$             67,500
	Paid in Capital in excess of Stated Value - Common Stock		$             12,500
May-01	Cash	$            3,46,375
	Common Stock		$          2,44,500
	Paid in Capital in excess of Stated Value - Common Stock		$          1,01,875
Aug-01	Oragnization Expenses	$                39,500
	Common Stock		$             34,500
	Paid in Capital in excess of Stated Value - Common Stock		$               5,000
Sep-01	Cash	$                72,000
	Common Stock		$             36,000
	Paid in Capital in excess of Stated Value - Common Stock		$             36,000
Nov-01	Cash	$            2,20,000
	Preferred Stock		$          2,00,000
	Paid in Capital in excess of Par Value - Preferred Stock		$             20,000

b.

Common Stock
		$          2,26,500	Jan-10
		$             67,500	Apr-01
		$          2,44,500	May-01
		$             34,500	Aug-01
		$             36,000	Sep-01
		$          6,09,000	Balance
Paid in Capital in excess of Stated Value - Common Stock
		$          2,26,500	Jan-10
		$             12,500	Apr-01
		$          1,01,875	May-01
		$               5,000	Aug-01
		$             36,000	Sep-01
		$          3,81,875	Balance
Preferred Stock
		$          5,50,000	Mar-01
		$          2,00,000	Nov-01
		$          7,50,000	Balance
Paid in Capital in excess of Par Value - Preferred Stock
		$             55,000	Mar-01
		$             20,000	Nov-01
		$             75,000	Balance

c.

Stockholders Equity
Paid in Capital
Common Stock	$            6,09,000
Preferred Stock	$            7,50,000
Paid in Capital in excess of Stated Value - Common Stock	$            3,81,875
Paid in Capital in excess of Par Value - Preferred Stock	$                75,000
Total Paid in Capital	$          18,15,875