Question

12/31/04 had the following balances in its S.E section of the B.S: Common Stock, $.50 par...

12/31/04 had the following balances in its S.E section of the B.S:


Common Stock, $.50 par $300k

APIC - Common Stock $4 million

APIC - Share Repurchase $50k

R.E $2 million

Treasury Stock, at cost, 30k shares $(600k)

During 2004 completed the follwing transactions

#1)

2/20: Issued40k shares of common stock (with a $.50 par value) in exchange for a machine w/ an appraised value of $800k

Required:

Answr the following Q's regarding certain amounts that would report within its 12/31/04 S.E section of the B.S

What is the required journal entry on 2/20?

#2)

6/17 : Resold 15k shares of treasury stock for $240k (The treasury stock was resold relates to common stock that was originally issue for $18 per share & was reacquired for $20 per share during 2003.)

Required:

Answr the following Q's regarding certain amounts that would report within its 12/31/04 S.E section of the B.S

What is the required journal entry on 6/17?

#3)

12/2 Issued 10k shares of common stock for $24 per share. Share issue costs to promote the stock issuance totaled $15k

Required:

Answr the following q's regarding certain amounts that would report within its 12/31/04 S.E section of the B.S

What is the required journal entry on 12/2?

#4)

12/31 Reported NI of $1.5 million and other comprehensve income of $200k on the companys statement of comprehensive income.

Required:

Answr the following Q's regarding certain amounts that would report within its 12/31/04 S.E section of the B.S

What is the required journal entry on 12/31? *There are 2 journal entries*

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Homework Answers

Answer #1

1.Shares raised will increase the stockholder's equity by (40000*0.5) = 20000

Journal Entry

DR Cash 20000

CR Share capital 20000

and revaluation surplus will raise the stockholder's quity by 780000 (800k - 20k)

DR Non current asset 780000

CR Revaluation surplus 780000

3.For share issue

DR cash 240000

CR Share capital    5000

CR share premium   235000

For share issue costs

DR share premium 15000

CR share premium 15000

Expenses incurred for issuing shares are deducted from share premium account

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