Chapter 13 - Problem 13-1B(30 minutes Part 1 a To record...

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Problem 13-1B (30 minutes) Part 1 a. To record sale of 3,000 ($3,000/$1 per share) shares of $1 par value common stock for $40 ($120,000/3,000) per share. b. To record issuance of 1,000 ($1,000/$1 per share) shares of $1 par value common stock to the company’s promoters for their efforts in organizing the company when the market value is $40 per share. c. To record acquisition of assets and liabilities by issuing 800 ($800/$1 per share) shares of $1 par value common stock at $50 per share and issuing a note for $18,300. d. To record sale of 1,200 shares of $1 par value common stock for $50 per share. Part 2 Number of outstanding shares Issued in (a) ...................................... 3,000 Issued in (b) ...................................... 1,000 Issued in (c) ...................................... 800 Issued in (d) ...................................... 1,200 Total .................................................. 6,000 Part 3 Minimum legal capital = Outstanding shares x Par value per share = 6,000 x $1 = $6,000 Part 4 Total paid-in capital from common stockholders From transaction (a) ........................ $120,000 From transaction (b) ........................ 40,000 From transaction (c) ........................ 40,000 From transaction (d) ........................ 60,000 Total paid-in capital ......................... $260,000 Part 5 Book value per common share Total stockholders’ equity (given). $283,000 Outstanding shares (from 2) ........... 6,000 Book value per common share ...... $ 47.17 ($283,000 / 6,000 shares)
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Problem 13-2B (60 minutes) Part 1 Jan. 10 Treasury Stock, Common .................................. 480,000 Cash ............................................................... 480,000 Purchased treasury stock (40,000 x $12). Mar. 2 Retained Earnings .............................................. 240,000 Common Dividend Payable ......................... 240,000 Declared $1.50 dividend on 160,000 outstanding shares. Mar. 31 Common Dividend Payable ............................... 240,000 Cash ............................................................... 240,000 Paid cash dividend. Nov. 11 Cash* 312,000 Treasury Stock, Common** ......................... 288,000 Paid-In Capital, Treasury Stock*** .............. 24,000 Reissued treasury stock.
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