Question

Kinkaid Co. was incorporated at the beginning of this year and had a number of transactions....

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 300,000
Common Stock, $25 Par Value 240,000
Paid-In Capital in Excess of Par Value, Common Stock 60,000
b. Organization Expenses 180,000
Common Stock, $25 Par Value 125,000
Paid-In Capital in Excess of Par Value, Common Stock 55,000
c. Cash 45,000
Accounts Receivable 18,500
Building 82,200
Notes Payable 59,800
Common Stock, $25 Par Value 55,900
Paid-In Capital in Excess of Par Value, Common Stock 30,000
d. Cash 140,000
Common Stock, $25 Par Value 77,000
Paid-In Capital in Excess of Par Value, Common Stock 63,000


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 $781,000?

Business   Accounting   
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Answer #1

2)

Computation of Number of share outstanding:

In transaction a. = $240000 / $25 = 9600 shares

In transaction b. = $125000 / $25 = 5000 shares

In transaction c . = $55900 / $25 = 2236 shares

In transaction d . = $77000 / $25 = 3080 shares

Total Number of shares outstanding = 9600 + 5000 + 2236 + 3080 = 19916 shares.

3)

Computation of Total paid in capital:

In transaction a. = $60000

In transaction b. = $55000

In transaction c . = $30000

In transaction d . = $63000

Total Number of shares outstanding = $60000 + $55000 + $30000 + $63000 = $208000.

4)

Computation of Book value per share:

Total book value = Common stock + Paid in capital + Retained Earnings

Common stock = $240000 + $125000 + $55900 + $77000 = $497900.

Total book value = $497900 + $781000 = $1278900.

Book Value per share = Total book value / Number of share outstanding

= $1278900 / 19916

= $6.42

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