Questions and Answers
What will be the amount credited to Paid-In Capital in Excess of Par when Bramble Company issues 5100 shares of $5 par value common stock for $187000?
When Vaughn Company issued 4200 shares to acquire land advertised at $115000, what amount will be debited to Land?
What should be credited to Common Stock when Swifty, Inc. issues 9600 shares at stated value of $10, sold for $15?
$96000
What journal entry is correct for Sunland Construction Company when issuing 810 shares of no-par common stock for $13300?
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Preferred stockholders have priority over common stockholders regarding which of the following?
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What is the total stockholders' equity for Bramble Corporation?
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How much cash will Blue Spruce Corporation receive from issuing 84,500 shares of common stock for cash at $6 per share?
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What is the Paid-in Capital in Excess of Stated Value for the common stock issued for land worth $91,000 by Blue Spruce Corporation?
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How much is the Cash received when 11,500 shares of common stock are issued for cash at $7 per share?
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Study Notes
Stock Issuance and Accounting Entries
- When Bramble Company issues 5,100 shares of $5 par value common stock for $187,000, Common Stock accounts for $25,500, and Paid-In Capital in Excess of Par accounts for $161,500.
- Vaughn Company, acquiring land valued at $115,000, issues 4,200 shares with a market value of $34 each, resulting in a debit of $142,800 to Land.
- Swifty, Inc. issues 9,600 shares at a stated value of $10 per share, collecting $15 per share, leading to a credit of $96,000 for Common Stock.
No-Par and Stated Value Stock Transactions
- Sunland Construction issues 810 shares of no-par common stock for $13,300, resulting in a journal entry of debiting Cash and crediting Common Stock each for $13,300.
Preferred vs. Common Stockholders' Rights
- Preferred stockholders have priority over common stockholders regarding both dividends and assets during liquidation.
Stockholders' Equity Section Composition
- Bramble Corporation's stockholders' equity section includes:
- Common Stock ($12 par value, 5,600 shares issued) totaling $67,200.
- Retained Earnings of $50,000.
- Subtracts Treasury Stock of 600 shares valued at $13,800.
Blue Spruce Corporation Transactions
- Jan. 10: 84,500 shares of common stock sold for $6 each, yields $507,000 cash and $253,500 to Common Stock.
- Mar. 1: 5,150 shares of preferred stock sold at $110, generating $566,500 in cash.
- Apr. 1: Issued 23,500 shares of common stock for land worth $81,500.
- May 1: 84,000 common shares sold at $5.00 each, cash inflow is $420,000.
- Aug. 1: 10,000 shares issued for attorney services, valued at $39,500.
- Sept. 1: Issued 11,500 shares at $7 each, generating $80,500 in cash.
- Nov. 1: 2,000 preferred shares sold at $111 each, generating $222,000 in cash.
Summary of Stock Transactions
- Each stock issuance transaction reflects the relation between cash received, stock par value, and additional paid-in capital, demonstrating the recording of equity in financial statements.
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Description
Test your knowledge on Bramble Company's stock issuance and accounting entries in ACC 122 Chapter 13. This set of flashcards covers crucial concepts such as common stock, cash debits, and paid-in capital. Perfect for reinforcing your understanding of accounting principles.
