Question

Prepare the Paid-In Capital portion of the Stockholders’ Equity section of the balance sheet using Method 1 of

Exhibit 8

. There are 375,000 shares of common stock authorized and 85,000 shares of preferred stock authorized. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Point Loma Group Inc.

Stockholders’ Equity (Paid-In Capital Section)

October 31, 20XX

1	Paid-in capital:
2
3
4
5
6
7
8
9

The following accounts and their balances were selected from the adjusted trial balance of Point Loma Group Inc., a freight forwarder, at October 31, the end of the current fiscal year:

1	Common Stock, no par, $14 stated value	$4,480,000.00
2	Paid-In Capital from Sale of Treasury Stock	45,000.00
3	Paid-In Capital in Excess of Par-Preferred Stock	210,000.00
4	Paid-In Capital in Excess of Stated Value-Common Stock	480,000.00
5	Preferred 2% Stock, $120 par	8,400,000.00
6	Retained Earnings	39,500,000.00

Prepare the Paid-In Capital portion of the Stockholders’ Equity section of the balance sheet using Method 1 of

Exhibit 8

. There are 375,000 shares of common stock authorized and 85,000 shares of preferred stock authorized. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Amount Descriptions
Common stock dividends
Common stock, no par, $14 stated value; 375,000 shares authorized, 320,000 issued
Excess over par
From sale of treasury stock
Increase in retained earnings
Preferred stock dividends
Preferred 2% stock, $120 par; 85,000 shares authorized, 70,000 issued
Paid-in capital, preferred stock
Paid-in capital, common stock
Total paid-in capital

Answer 1

Point Loma Group Inc
Stockholders’ Equity (Paid-In Capital Section)
October 31, 20XX
Paid-in Capital:
Preferred 2% stock, $120 par; 85,000 shares authorized, 70,000 issued	$8,400,000
Excess over par	$210,000
Paid-in capital, preferred stock                [$8,400,000 + $210,000]		$8,610,000
Common stock, no par, $14 stated value; 375,000 shares authorized, 320,000 issued	$4,480,000
Excess over par	$480,000
Paid-in capital, common stock                  [$4,480,000 + $480,000]		$4,960,000
From sale of treasury stock		$45,000
Total paid-in capital                                [$8,610,000 + $4,960,000 + $45,000]		$13,615,000