Question

On February 12, Quality Carpet Inc., a carpet wholesaler, issued for cash 736,000 shares of no-par common stock (with a stated value of $1.20) at $3.10, and on August 3, it issued for cash 15,600 shares of preferred stock, $45 par at $64.

Required:

A.	Journalize the entries for February 12 and August 3, assuming that the common stock is to be credited with the stated value. Refer to the Chart of Accounts for exact wording of account titles.
B.	What is the total amount invested (total paid-in capital) by all stockholders as of August 3?

Journal

A. Journalize the entries for February 12 and August 3, assuming that the common stock is to be credited with the stated value. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6

Final Question

B. What is the total amount invested (total paid-in capital) by all stockholders as of August 3?

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Answer 1

Date	DESCRIPTION	Debit ($)	Credit ($)
12-Feb	Cash	2,281,600
	Common stock [736,000 x 1.20]		883,200
	Paid in capital in excess of common stock		1,398,400
3-Aug	Cash	998,400
	Preferred Stock		702,000
	Paid in capital in excess of Preferred Stock		296,400
	Total amount invested (total paid-in capital) by all stockholders as of August 3
	Common stock	883,200
	Preference stock	702,000
	Paid in capital in excess of common stock	1,398,400
	Paid in capital in excess of Preferred stock	296,400
	Total paid in capital	3,280,000