Question

In 2017, the Hicklien Corporation was formed. The corporate charter authorizes the issuance of 10,000,000 shares of $1 par value common stock, and 4,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock.      The following selected transactions took place in 2017:

>1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares.

>25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500.

>200,000 shares of preferred stock were issued for cash. The market price of the stock was $95.

>10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization.

>5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100

>15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000.   The stock was selling in the market at $102 per share.

INSTRUCTIONS:

Prepare a stockholders’ equity section of the Hicklien Corporation balance sheet dated December 31, 2017.    Include full disclosure.

Answer 1

stockholders’ equity section of the Hicklien Corporation balance sheet dated December 31, 2017.
Stock holders Equity	Amount in $	Amount in $
Paid in capital
preferred stock $5 par value 4000,000 Shares authorised, 220,000 Sahres are issued and outstanding		$1,100,000
Common Stock $1 par , 10,000,000 Authorised, 1,235,000 Shares are issued and outstanding		$1,235,000
Total capital Stock		$2,335,000
Additional paid in capital
In execess of par value -- preferred Stock	$20,050,000
In execess of par value -- Common Stock	$11,039,500
Total Additional paid in capital		$31,089,500
Total paid in capital		$33,424,500
Retained earnings		$0
Total paid in capital And retained Earnings		$33,424,500
Less: trasury Stock		$0
Total Stock holders equity		$33,424,500

	Working notes	Common Stock	paid in capital inexcess of par value - Common Stock	Preferred Stock	paid in capital inexcess of par value - Preferred Stock
1	1,200,000 shares of common stock were issued for cash.   The market price of the stock was $10 per shares.	$                12,00,000	$                                   1,08,00,000
		(1200,000*$1)	(1200,000*($10-$1))
2	25,000 shares of common stock were issued for land.   The asking price of the land was $270,000.   The fair value of the land was $239,500.	$                25,000.00	$                                   2,14,500.00
		(25000*$1)	($239500-25000)
3	200,000 shares of preferred stock were issued for cash. The market price of the stock was $95			$      10,00,000.00	$                1,80,00,000.00
				(200,000*$5	(200,000*($95-$5)
4	10,000 shares of common stock were issued to attorneys in payment of their bill for $35,000 of services performed during the company’s organization	$                10,000.00	$                                       25,000.00
		(10,000*$1)	($35000-$10,000)
5	5,000 shares of preferred stock were issued for cash.   The market price of the stock was $100			$            25,000.00	$                      4,75,000.00
				(5000*$5)	(5000*($100-$5)
6	15,000 shares of preferred stock were issued for machinery and equipment.   The fair value of the machinery and equipment was $1,650,000.			$            75,000.00	$                    15,75,000.00
				(15000*$5)	($1650,000-75000)
	Amount	$          12,35,000.00	$                             1,10,39,500.00	$      11,00,000.00	$                2,00,50,000.00	$                                                  3,34,24,500.00
	Number of Shares issued	1235000		220000