Question

Newly formed S&J Iron Corporation has 191,000 shares of $3 par common stock authorized. On March 1, Year 1, S&J Iron issued 10,500 shares of the stock for $10 per share. On May 2, the company issued an additional 24,000 shares for $19 per share. S&J Iron was not affected by other events during Year 1. Required a. Record the transactions in a horizontal statements model. (In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event.) b. Determine the amount S&J Iron would report for common stock on the December 31, Year 1, balance sheet. c. Determine the amount S&J Iron would report for paid-in capital in excess of par. d. What is the total amount of capital contributed by the owners? e. What amount of total assets would S&J Iron report on the December 31, Year 1, balance sheet? b. Determine the amount S&J Iron would report for common stock on the December 31, Year 1, balance sheet. c. Determine the amount S&J Iron would report for paid-in capital in excess of par. d. What is the total amount of capital contributed by the owners? e. What amount of total assets would S&J Iron report on the December 31, Year 1, balance sheet?

Answer 1

a) Horizontal Statement model:
Transaction	Assets	equals	Liabilities +	Common Stock +	Paid in Capital in excess of par	Cash flow Statement
Year 1						Activity	Amount
1-Mar	105000	equals	0	31500	73500	Financing	105000
2-May	456000	equals	0	72000	384000	Financing	456000
Total	561000	equals	0	103500	457500		561000
b) The amount reported under Common Stock (at par value) = $103500
c) The amount reported under Paid in capital in excess of par = $457500
d) The total amount of capital contributed by the owners = $561000
e) The amount of total assets would be reported on balance sheet = $561000