Learning Materials
Features
Discover
Chapter 15: Question 6Q (page 810)
What is meant by par value, and what is its significance to stockholders?
The par value is a fixed and arbitraryamount per share attributed to the shares by the incorporators. It helps to determine the overall value of the shares issued.
Over 30 million students worldwide already upgrade their learning with 91影视!
All the tools & learning materials you need for study success - in one app.
Get started for free
(Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, \(100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of \)1 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 80,000 shares of common stock for cash at \(5 per share.
Mar. 1 Issued 5,000 shares of preferred stock for cash at \)108 per share.
Apr. 1 Issued 24,000 shares of common stock for land. The asking price of
the land was \(90,000; the fair value of the land was \)80,000.
May 1 Issued 80,000 shares of common stock for cash at \(7 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of
their bill of \)50,000 for services rendered in helping the company
organize.
Sept. 1 Issued 10,000 shares of common stock for cash at \(9 per share.
Nov. 1 Issued 1,000 shares of preferred stock for cash at \)112 per share.
Instructions
Prepare the journal entries to record the above transactions.
Seles Corporation鈥檚 charter authorized issuance of 100,000 shares of \(10 par value common stock and 50,000 shares of \)50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others.
Instructions
Record the transactions listed above in journal entry form.
Wilco Corporation has the following account balances on December 31, 2017.
Share capital鈥攐rdinary, \(5 par value \) 510,000
Treasury shares 90,000
Retained earnings 2,340,000
Share premium鈥攐rdinary 1,320,000
Instructions
Prepare Wilco鈥檚 December 31, 2017, equity section.
What are the different bases for stock valuation when assets other than cash are received for issued shares of stock?
Hatch Company has two classes of capital stock outstanding: 8%, \(20 par preferred and \)5 par common. At December 31, 2017, the following accounts were included in stockholders鈥� equity.
Preferred Stock, 150,000 shares \( 3,000,000
Common Stock, 2,000,000 shares 10,000,000
Paid-in Capital in Excess of Par鈥擯referred Stock 200,000
Paid-in Capital in Excess of Par鈥擟ommon Stock 27,000,000
Retained Earnings 4,500,000
The following transactions affected stockholders鈥� equity during 2018.
Jan.1 30,000 shares of preferred stock issued at \)22 per share.
Feb.1 50,000 shares of common stock issued at \(20 per share.
June 1 2-for-1 stock split (par value reduced to \)2.50).
July 1 30,000 shares of common treasury stock purchased at \(10 per
share. Hatch uses the cost method.
Sept.15 10,000 shares of treasury stock reissued at \)11 per share.
Dec.31 The preferred dividend is declared, and a common dividend of 50垄
per share is declared.
Dec. 31 Net income is $2,100,000.
Instructions
Prepare the stockholders鈥� equity section for Hatch Company at December 31, 2018. Show all supporting computations.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
Explanations 
Textbooks 
Flashcards 
91影视 AI 
Notes 
Study Plans 
Study Sets 
Find a degree 
Magazine