Question

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

	General Journal	Debit	Credit
a.	Cash	310,000
	Common Stock, $25 Par Value		230,000
	Paid-In Capital in Excess of Par Value, Common Stock		80,000
b.	Organization Expenses	190,000
	Common Stock, $25 Par Value		130,000
	Paid-In Capital in Excess of Par Value, Common Stock		60,000
c.	Cash	43,000
	Accounts Receivable	18,000
	Building	82,400
	Notes Payable		59,800
	Common Stock, $25 Par Value		53,600
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	138,000
	Common Stock, $25 Par Value		77,000
	Paid-In Capital in Excess of Par Value, Common Stock		61,000

Required:
2. How many shares of common stock are outstanding at year-end?
3. What is the total paid-in capital at year-end?
4. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $798,000? (include numerator and denominator for both)

part two

Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018.

Common stock—$25 par value, 100,000 shares authorized, 50,000 shares issued and outstanding	$	1,250,000
Paid-in capital in excess of par value, common stock		70,000
Retained earnings		400,000
Total stockholders' equity	$	1,720,000

During 2019, the following transactions affected its stockholders’ equity accounts.

Jan.		2		Purchased 4,500 shares of its own stock at $20 cash per share.
Jan.		5		Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb.		28		Paid the dividend declared on January 5.
July		6		Sold 1,688 of its treasury shares at $24 cash per share.
Aug.		22		Sold 2,812 of its treasury shares at $17 cash per share.
Sept.		5		Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Oct.		28		Paid the dividend declared on September 5.
Dec.		31		Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required:
1. Prepare journal entries to record each of these transactions.
2. Prepare a statement of retained earnings for the year ended December 31, 2019.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.

part 3

At September 30, the end of Beijing Company’s third quarter, the following stockholders’ equity accounts are reported.

Common stock, $12 par value	$	360,000
Paid-in capital in excess of par value, common stock		100,000
Retained earnings		320,000

In the fourth quarter, the following entries related to its equity are recorded.

Date	General Journal	Debit	Credit
Oct. 2	Retained Earnings	70,000
	Common Dividend Payable		70,000
Oct. 25	Common Dividend Payable	70,000
	Cash		70,000
Oct. 31	Retained Earnings	79,000
	Common Stock Dividend Distributable		38,000
	Paid-In Capital in Excess of Par Value, Common Stock		41,000
Nov. 5	Common Stock Dividend Distributable	38,000
	Common Stock, $12 Par Value		38,000
Dec. 1	Memo—Change the title of the common stock
	account to reflect the new par value of $4.
Dec. 31	Income Summary	250,000
	Retained Earnings		250,000

Required:
2. Complete the following table showing the equity account balances at each indicated date.

Answer 1