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	280,000
	Common Stock, $25 Par Value		230,000
	Paid-In Capital in Excess of Par Value, Common Stock		50,000
b.	Organization Expenses	190,000
	Common Stock, $25 Par Value		129,000
	Paid-In Capital in Excess of Par Value, Common Stock		61,000
c.	Cash	43,500
	Accounts Receivable	18,000
	Building	82,400
	Notes Payable		59,900
	Common Stock, $25 Par Value		54,000
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	134,000
	Common Stock, $25 Par Value		80,000
	Paid-In Capital in Excess of Par Value, Common Stock		54,000

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 $791,000?

How many shares of common stock are outstanding at year-end? What is the amount of minimum legal capital (based on par value) at year-end? What is the total paid-in capital at year-end?

	2. Number of outstanding shares 3. Minimum legal capital 4. Total paid-in capital

What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $791,000?

	Book Value per Common Share Choose Numerator: / Choose Denominator: = Book Value per Common Share / = Book value per common share / =

Answer 1

2)	Number of outstanding shares
	issued in (a)			9,200
	issued in (b)			5,160
	issued in ©			2,160
	issued in (d)			3,200
	total			19,720	answer
3)	minimum legal capital = outstanding shares*par value per share
			19720*25
			493000	answer
4)	total paid in capital from common stockholders
	from transaction (a)			280,000
	From transaction (b)			190,000
	From transaction ©			84,000
	from transaction (d)			134,000
	total paid in capital.			688,000	answer
5)		Book value per common share
	choose numerator		/	Choose denominator			=	book value per CS
	total stocholders			outstanding shares
	equity
	791,000		/	19,720			=	40.11