answer_keys_week12

answer_keys_week12 - Problem 13-1A (30 minutes) Part 1 a....

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Problem 13-1A (30 minutes) Part 1 a. To record sale of 10,000 ($250,000/$25 per share) shares of $25 par value common stock for $32 ($320,000/10,000 shares) per share. b. To record issuance of 5,000 ($125,000/$25 per share) shares of $25 par value common stock to the company’s promoters for their efforts in organizing the company when the market value is $32 ($160,000/5,000 shares) per share. c. To record acquisition of assets and liabilities by issuing 2,000 ($50,000/$25) shares of $25 par value common stock at $42 per share. d. To record sale of 3,000 ($75,000/$25 per share) shares of $25 par value common stock for $41 ($123,000/3,000 shares) per share. Part 2 Number of outstanding shares Issued in (a). ....................................................... 10,000 Issued in (b). ....................................................... 5,000 Issued in (c). ....................................................... 2,000 Issued in (d). ....................................................... 3,000 Total. .................................................................. 20,000 Part 3 Minimum legal capital = Outstanding shares x Par value per share = 20,000 x $25 = $500,000 Part 4 Total paid-in capital from common stockholders From transaction (a). ...................................... $320,000 From transaction (b). ...................................... 160,000 From transaction (c). ....................................... 84,000 From transaction (d). ...................................... 123,000 Total paid-in capital. ....................................... $687,000 Part 5 Book value per common share Total stockholders’ equity (given). ................... $785,000 Outstanding shares (from Part 2). .................... 20,000 Book value per common share. ........................ $ 39.25 ($785,000 / 20,000 shares)
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Problem 13-2A (60 minutes) Part 1 Jan. 1 Treasury Stock, Common. ......................................................... 112,500 Cash. ...................................................................................... 112,500
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This note was uploaded on 05/04/2011 for the course STAT 1301 taught by Professor Smslee during the Spring '08 term at HKU.

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answer_keys_week12 - Problem 13-1A (30 minutes) Part 1 a....

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