Question

On February 12, Quality Carpet Inc., a carpet wholesaler, issued for cash 736,000 shares of no-par common stock (with a stated value of $1.20) at $3.10, and on August 3, it issued for cash 15,600 shares of preferred stock, $45 par at $64.

Required:

A.	Journalize the entries for February 12 and August 3, assuming that the common stock is to be credited with the stated value. Refer to the Chart of Accounts for exact wording of account titles.
B.	What is the total amount invested (total paid-in capital) by all stockholders as of August 3?

Journal

A. Journalize the entries for February 12 and August 3, assuming that the common stock is to be credited with the stated value. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6

Final Question

B. What is the total amount invested (total paid-in capital) by all stockholders as of August 3?

______________

Answer 1

Date	Description	Post. Ref.	Debit	Credit	Assets	Liabilities	Equity
February 12	Cash		2281600		↑			=736000*3.10
	Common Stock			883200			↑	=736000*1.20
	Paid-In Capital in Excess of Stated Value-Common Stock			1398400			↑
August 3	Cash		998400		↑			=15600*64
	Preferred Stock			702000			↑	=15600*45
	Paid-In Capital in Excess of Par-Preferred Stock			296400			↑

B
Total amount invested (total paid-in capital)	3280000	=2281600+998400