Question

Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations.

	General Journal	Debit	Credit
a.	Cash	290,000
	Common Stock, $25 Par Value		230,000
	Paid-In Capital in Excess of Par Value, Common Stock		60,000
b.	Organization Expenses	150,000
	Common Stock, $25 Par Value		128,000
	Paid-In Capital in Excess of Par Value, Common Stock		22,000
c.	Cash	44,500
	Accounts Receivable	17,500
	Building	82,100
	Notes Payable		59,600
	Common Stock, $25 Par Value		54,500
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	123,000
	Common Stock, $25 Par Value		78,000
	Paid-In Capital in Excess of Par Value, Common Stock		45,000

Required:
2. How many shares of common stock are outstanding at year-end?
3. What is the amount of minimum legal capital (based on par value) at year-end?
4. What is the total paid-in capital at year-end?
5. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $796,000?

Answer 1

2)	Number of outstanding shares
	issued in (a)			9,200
	issued in (b)			5,120
	issued in ©			2,180
	issued in (d)			3,120
	total			19,620	answer
3)	minimum legal capital = outstanding shares*par value per share
			19620*25
			490500	answer
4)	total paid in capital from common stockholders
	from transaction (a)			290,000
	From transaction (b)			150,000
	From transaction ©			74,500
	from transaction (d)			123,000
	total paid in capital.			637,500	answer
5)		Book value per common share
	choose numerator		/	Choose denominator			=	book value per CS
	total stocholders			outstanding shares
	equity
	796,000		/	19,620			=	40.57