Question

Jan 1. Ehrlich Co. authorized the issuance of 300,000 shares of common stock, par value of $4.

Jan 15 Ehrlich Co. issued 10,000 shares of its stock for $7 per share

Mar 20 Ehrlich Co. issued 50,000 shares of stock for $10 per share

Dec 31 Net income for the year was $150,000. Prepare the necessary closing entry

Dec 31. What is Ehrlich’s total paid in capital? (show calculation)

              What is Ehrlich’s total stockholders’ equity? (show calculation)

Answer 1

Date	Account Titles	Debit	Credit
Jan. 1	No entry
Jan. 15	Cash	$         70,000
	Common Stock		$         40,000
	Paid in Capital in excess of par-Common		$         30,000
Mar. 20	Cash	$       500,000
	Common Stock		$      200,000
	Paid in Capital in excess of par-Common		$      300,000
Dec. 31	Income Summary	$       150,000
	Retained Earnings		$      150,000

Stockholder's Equity
Paid in Capital
Common Stock	$       240,000
Paid in Capital in excess of par	$       330,000
Total Paid in Capital	$      570,000
Retained Earnings	$       150,000
Total Stockholder's Equity	$      720,000