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.

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	300,000
	Common Stock, $25 Par Value		250,000
	Paid-In Capital in Excess of Par Value, Common Stock		50,000
b.	Organization Expenses	150,000
	Common Stock, $25 Par Value		125,000
	Paid-In Capital in Excess of Par Value, Common Stock		25,000
c.	Cash	43,000
	Accounts Receivable	15,000
	Building	81,500
	Notes Payable		59,500
	Common Stock, $25 Par Value		50,000
	Paid-In Capital in Excess of Par Value, Common Stock		30,000
d.	Cash	120,000
	Common Stock, $25 Par Value		75,000
	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? Explanation: 2. Number of outstanding shares        Issued in (a) 10,000     Issued in (b) 5,000     Issued in (c) 2,000     Issued in (d) 3,000         Total 20,000          3. Minimum legal capital =  Outstanding shares × Par value per share   = 20,000 × $25 = $500,000    4. Total paid-in capital from common stockholders          From transaction (a) $ 300,000     From transaction (b)   150,000     From transaction (c)   80,000     From transaction (d)   120,000        Total paid-in capital $ 650,000          5. Book value per common share             Total stockholders' equity (given) $ 695,000       Outstanding shares (from Part 2)   20,000              Book value per common share $ 34.75     ($695,000 / 20,000 shares)