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Chp 15 Exercises and Problems Solutions

Chp 15 Exercises and Problems Solutions - EXERCISE...

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EXERCISE 15-2 (15–20 minutes) Jan. 10 Cash (80,000 X $5) ......................................... 400,000 Common Stock (80,000 X $1) ................. 80,000 Paid-in Capital in Excess of Stated Value—Common Stock ....................... 320,000 (80,000 X $4) Mar. 1 Cash (5,000 X $108) ....................................... 540,000 Preferred Stock (5,000 X $100) ............... 500,000 Paid-in Capital in Excess of Par Value—Preferred Stock ....................... 40,000 (5,000 X $8) April 1 Land ................................................................. 80,000 Common Stock (24,000 X $1) ................. 24,000 Paid-in Capital in Excess of Stated Value—Common Stock ....................... 56,000 ($80,000 – $24,000) May 1 Cash (80,000 X $7) ......................................... 560,000 Common Stock (80,000 X $1) ................. 80,000 Paid-in Capital in Excess of Stated Value—Common Stock ....................... 480,000 (80,000 X $6) Aug. 1 Organization Expense ................................... 50,000 Common Stock (10,000 X $1) ................. 10,000 Paid-in Capital in Excess of Stated
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Value—Common Stock ....................... 40,000 ($50,000 – $10,000)
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EXERCISE 15-2 (Continued) Sept. 1 Cash (10,000 X $9) ......................................... 90,000 Common Stock (10,000 X $1) ................. 10,000 Paid-in Capital in Excess of Stated Value—Common Stock ....................... 80,000 (10,000 X $8) Nov. 1 Cash (1,000 X $112) ....................................... 112,000 Preferred Stock (1,000 X $100) ............... 100,000 Paid-in Capital in Excess of Par Value—Preferred Stock ....................... 12,000 (1,000 X $12) EXERCISE 15-5 (10–15 minutes) (a) FMV of Common (500 X $165) $ 82,500 FMV of Preferred (100 X $230) 23,000 $105,500 Allocated to Common: $82,500/$105,500 X $100,000 $ 78,199 Allocated to Preferred: $23,000/$105,500 X $100,000 21,801 Total allocation (rounded to nearest dollar) $100,000 Cash ........................................................................... 100,000 Common Stock (500 X $10) ............................... 5,000 Paid-in Capital in Excess of Par— Common ($78,199 – $5,000) .......................... 73,199 Preferred Stock (100 X $100) ............................ 10,000 Paid-in Capital in Excess of Par—
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Preferred ($21,801 – $10,000) ....................... 11,801 (b) Lump-sum receipt $100,000 Allocated to common (500 X $170) 85,000 Balance allocated to preferred $ 15,000 Cash ........................................................................... 100,000 Common Stock ...................................................
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