Explanation Par value : The corporation charter assigns and allocates the dollar value for its share which is referred to as par value. Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares. a. Prepare the journal entry on March 1. Date Account Titles and Explanation Post Ref. Debit ($) Credit ($) March 1 Cash 297,500 Common Stock, $4 par value (1) 170,000 Paid-in Capital–Excess of Par value, Common stock (2) 127,500 (To record issue of common stock at par value for cash) Table (1) Working Notes : Compute common stock value . Common stock value= Number of shares × Par value per share = 42,500 shares × $4 = $ 170,000 (1) Compute paid-in capital in excess of par value . Paid-in capital in excess of par value } = { Cash received – Common stock value } = $297,500 – $170,000 = $127,500 (2) Cash is an asset account. The amount is increased, because cash is received upon stock issued. Therefore, debit Cash account. Common Stock is a stockholders’ equity account and the amount is increased due to issuance of common stock. Therefore, credit Common Stock account. Paid-in Capital in Excess of Par Value is a stockholders’ equity account and the amount is increased due to increase in capital. Therefore, credit Paid-in Capital in Excess of Par Value account. b. Prepare the journal entry on April 1. Date Account Titles and Explanation Post Ref. Debit ($) Credit ($) April 1 Cash 70,000 Common Stock, No par value 70,000 (To record issue of no par value common stock for cash) Table (2) Cash is an asset account. The amount is increased, because cash is received upon stock issued. Therefore, debit Cash account. Common Stock is a stockholders’ equity account and the amount is increased due to issuance of common stock

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The sto…

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Chapter 13 Solutions

Principles of Financial Accounting.

Ch. 13 - A corporation issues 6,000 shares of 5 par value...Ch. 13 - A company reports net income of 75,000. Its...Ch. 13 - A company has 5,000 shares of 100 par preferred...Ch. 13 - A company paid cash dividends of 0.81 per share....Ch. 13 - Prob. 5MCQ Ch. 13 - What are organization expenses? Provide examples.Ch. 13 - How are organization expenses reported?Ch. 13 - Prob. 3DQ Ch. 13 - What is the difference between authorized shares...Ch. 13 - Prob. 5DQ

Ch. 13 - List the general rights of common stockholders.Ch. 13 - What is the difference between the market value...Ch. 13 - Identify and explain the importance of the three...Ch. 13 - Prob. 9DQ Ch. 13 - How does declaring a stock dividend affect the...Ch. 13 - What is the difference between a stock dividend...Ch. 13 - Prob. 12DQ Ch. 13 - Prob. 13DQ Ch. 13 - How is book value per share computed for a...Ch. 13 - Prob. 15DQ Ch. 13 - Prob. 16DQ Ch. 13 - Prob. 17DQ Ch. 13 - Prob. 1QS Ch. 13 - Issuance of common stock Prepare the journal entry...Ch. 13 - Issuance of par and stated value common stock...Ch. 13 - Issuance of no-par common stock Prepare the...Ch. 13 - Prob. 5QS Ch. 13 - Accounting for cash dividends Prepare journal...Ch. 13 - Prob. 7QS Ch. 13 - Accounting for small stock dividend The...Ch. 13 - Prob. 9QS Ch. 13 - Accounting for dividends For each of the following...Ch. 13 - Preferred stock issuance and dividends 1. Prepare...Ch. 13 - Dividend allocation between classes of...Ch. 13 - Prob. 13QS Ch. 13 - Prob. 14QS Ch. 13 - Purchase and sale of treasury stock On May 3,...Ch. 13 - Prob. 16QS Ch. 13 - Prob. 17QS Ch. 13 - For each situation, identify whether it is treated...Ch. 13 - Prob. 19QS Ch. 13 - Basic earnings per share Murray Company reports...Ch. 13 - Epic Company earned net income of 900,000 this...Ch. 13 - Price-earnings ratio Compute Topp Companys...Ch. 13 - Prob. 23QS Ch. 13 - Book value per common share The stockholders...Ch. 13 - Prob. 1E Ch. 13 - Prob. 2E Ch. 13 - Accounting for par, stated, and no-par stock...Ch. 13 - Recording stock issuances Prepare journal entries...Ch. 13 - Stock issuance for noncash assets Sudoku Company...Ch. 13 - On June 30, Sharper Corporations stockholders...Ch. 13 - Prob. 7E Ch. 13 - The stockholders equity section of TVX Company on...Ch. 13 - Prob. 9E Ch. 13 - Yorks outstanding stock consists of 80,000 shares...Ch. 13 - Prob. 11E Ch. 13 - Prob. 12E Ch. 13 - In Draco Corporations first year of business, the...Ch. 13 - Prob. 14E Ch. 13 - Prob. 15E Ch. 13 - Prob. 16E Ch. 13 - Prob. 17E Ch. 13 - Price-earnings ratio computation and...Ch. 13 - Prob. 19E Ch. 13 - The equity section of Cyril Corporations balance...Ch. 13 - Prob. 21E Ch. 13 - Stockholders equity transactions and analysis...Ch. 13 - Prob. 2AP Ch. 13 - Prob. 3AP Ch. 13 - The equity sections for Atticus Group at the...Ch. 13 - Prob. 5AP Ch. 13 - Stockholders equity transactions and analysis...Ch. 13 - Balthus Corp. reports the following components of...Ch. 13 - Prob. 3BP Ch. 13 - Prob. 4BP Ch. 13 - Prob. 5BP Ch. 13 - Santana Rey created Business Solutions on October...Ch. 13 - Prob. 1AA Ch. 13 - Use the following comparative figures for Apple...Ch. 13 - Prob. 3AA Ch. 13 - Prob. 1BTN Ch. 13 - Access the March 1, 2017, fi ling of the 2016...Ch. 13 - Prob. 5BTN

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