Acct 551 Week 4 Hoework

Chapter 15 – Homework Week 4

E15-2 Recording the Issuance of Common and Preferred Stock –
Kathleen Battle Corp.

Journal entries to record given transaction are listed below:

1/10 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 (80,000 x $4) $320,000

3/01 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 (5,000 x $8) $   40,000

4/01 Land $   80,000
Common Stock (24,000 x $1) $   24,000
Paid-in Capital in Excess of Stated Value –
Common Stock ($80,000 - $24,000) $   64,000

5/01 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 (80,000 x $6) $480,000

8/01 Organized Expense $   50,000
Common Stock (10,000 x $1) $   10,000
Paid-in Capital in Excess of Stated Value –
Common Stock ($50,000 - $10,000) $   40,000

9/01 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 (10,000 x $8) $     80,000

11/1 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 (1,000 x $12) $   12,000

E15-5 Lump Sum Sales of Stock with Preferred Stock – Dave Matthews Inc.

  (a) Fair Market Value of Common Stock   (500 x $165) $   82,500
Fair Market Value of Preferred Stock (100 x $230) $   23,000
$105,500

Allocated to Common Stock $   78,199
($82,500 / $105,500 x $100,000)
Allocated to Preferred Stock $   21,801
($23,000 / $105,500 x $100,000)
Total Allocation $100,000
Journal entry:
Cash $100,000
Common Stock (500 X $10) $     5,000
Paid-in Capital in Excess of Par –
Common Stock ($78,199 - $5,000) $   73,199
Preferred Stock (100 x...