EXERCISE 15-5 - 10,000 Paid-in Capital in Excess of Par—...

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EXERCISE 15-5 (10–15 minutes) (a) Fair value of Common (500 X $168). .......................................... $ 84,000 Fair value of Preferred (100 X $210) . ......................................... 21,000 $105,000 Allocated to Common: $84,000/$105,000 X $100,000 . ........ $ 80,000 Allocated to Preferred: $21,000/$105,000 X $100,000. ........ 20,000 Total allocation . ................................................................................ $100,000 Cash . .................................................................................... 100,000 Common Stock (500 X $10). .................................. 5,000 Paid-in Capital in Excess of Par— Common ($80,000 – $5,000). ............................. 75,000 Preferred Stock (100 X $100) . ...............................
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Unformatted text preview: 10,000 Paid-in Capital in Excess of Par— Preferred ($20,000 – $10,000) . ......................... 10,000 (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. ......................................................... 5,000 Paid-in Capital in Excess of Par— Common ($85,000 – $5,000). ............................. 80,000 Preferred Stock . ........................................................ 10,000 Paid-in Capital in Excess of Par— Preferred ($15,000 – $10,000). .......................... 5,000...
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