EXERCISE 13-12
MEMO
To: President
From: Your name , Chief Accountant
Re: Questions about Stockholders’ Equity Section
Your memorandum about the stockholders’ equity section was received this
morning. I hope the following will answer your questions.
EXERCISE 13-13
ALUMINUM COMPANY OF AMERICA
Stockholders’ equity (in millions of dollars)
Paid-in capital
Capital stock
Preferred stock, $100 par value,
557,740 shares authorized,
557,649 shares issued and
546,024 shares outstanding ………………….. $ 56
Common stock, $1 par value,
1,800,000,000 shares authorized,
EXERCISE 13-14
Paid-in Capital
Account
Capital
Stock
Additional
Retained
Earnings
Other
Common Stock …………………………...
Preferred Stock …………………………..
Treasury Stock …………………………...
X
X
X
SOLUTIONS TO PROBLEMS
(a) Jan. 10 Cash (80,000 X $4) ……………………………. 320,000
Common Stock (80,000 X $2) ……… 160,000
Paid-in Capital in Excess of
Stated Value—Common
Stock (80,000 X $2) …………………. 160,000
Apr. 1 Land ………………………………………………… 85,000
Common Stock (24,000 X $2) ……… 48,000
Paid-in Capital in Excess of
Stated Value—Common
Stock ($85,000 – $48,000) ……….. 37,000
Aug. 1 Organization Expense ………………………. 30,000
Common Stock (10,000 X $2) ……… 20,000
Paid-in Capital in Excess of
Stated Value—Common
Stock ($30,000 – $20,000) ……….. 10,000
PROBLEM 13-1A (Continued)
Nov. 1 Cash (1,000 X $109) …………………………. 109,000
Preferred Stock (1,000 X $100) …… 100,000
(b)
Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 10
Apr. 1
J5
J5
160,000
48,000
160,000
208,000
Paid-in Capital in Excess of Par—Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Mar. 1
J5
25,000
25,000
Paid-in Capital in Excess of Stated Value—Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 10
Apr. 1
J5
J5
160,000
37,000
160,000
197,000
PROBLEM 13-1A (Continued)
(c) DELONG CORPORATION
Paid-in capital
Capital stock
8% Preferred stock, $100 par
value, 10,000 shares
authorized, 6,000 shares
issued and outstanding ……………… $ 600,000
Common stock, no par, $2
stated value, 500,000 shares
authorized, 204,000 shares
PROBLEM 13-2A
(a) Mar. 1 Treasury Stock (5,000 X $8) ………………… 40,000
Cash …………………………………………… 40,000
Sept. 1 Cash (2,000 X $10) ……………………………… 20,000
Treasury Stock (2,000 X $8) ………….. 16,000
Paid-in Capital from Treasury
Stock (2,000 X $2) …………………….. 4,000
(b)
Paid-in Capital from Treasury Stock
Date
Explanation
Ref.
Debit
Credit
Balance
June 1
J10
4,000
4,000
Treasury Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Mar. 1
J10
40,000
40,000
PROBLEM 13-2A (Continued)
Retained Earnings
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
100,000
(c) FECHTER CORPORATION
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, $5 par,
100,000 shares issued and
99,000 outstanding……………… $500,000
Additional paid-in capital
In excess of par ……………………… $200,000
PROBLEM 13-3A
(a) Feb. 1 Cash …………………………..…………………… 120,000
Common Stock (25,000 X $1) …….. 25,000
Paid-in Capital in Excess of
Apr. 14 Cash ……………………………………………….. 33,000
Paid-in Capital from
Treasury Stock
($33,000 – $30,000) ………………… 3,000
Treasury Stock (6,000 X $5) ……….. 30,000
Sept. 3 Patents …………………………..………………. 35,000
Common Stock (5,000 X $1) ………. 5,000
Nov. 10 Treasury Stock ………………………………… 6,000
Cash ………………………………………… 6,000
(b)
Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
400,000
Common Stock
PROBLEM 13-3A (Continued)
Paid-in Capital in Excess of Par—Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
100,000
Date
Explanation
Ref.
Debit
Credit
Paid-in Capital from Treasury Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 14
J5
3,000
3,000
Retained Earnings
Date
Explanation
Debit
Credit
Balance
Jan. 1
Balance
Treasury Stock
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 13-3A (Continued)
(c) CASTLE CORPORATION
Stockholders’ equity
Paid-in capital
Capital stock
8% Preferred stock, $50
par value,
10,000 shares authorized,
8,000 shares issued and
outstanding ………………………. $ 400,000
Common stock, no par,
Additional paid-in capital
In excess of par—
preferred stock …………………. $ 100,000
In excess of stated value—
common stock ………………….. 1,575,000
Retained earnings …………………………….. 2,268,000
Total paid-in capital and
retained earnings ………… 5,376,000
(a) Feb. 1 Land ………………………………………………. 120,000
Preferred Stock (2,000 X $50) ……. 100,000
Paid-in Capital in Excess of
Par—Preferred Stock
($120,000 – $100,000) ……………. 20,000
July 1 Cash (16,000 X $7) ………………………….. 112,000
Common Stock (16,000 X $5) ……. 80,000
Sept. 1 Patent (400 X $70) …………………………... 28,000
Preferred Stock (400 X $50) ………. 20,000
Paid-in Capital in Excess of
Par—Preferred Stock
(400 X $20) …………………………... 8,000
Dec. 1 Cash (8,000 X $7.50) ……………………….. 60,000
Dec. 31 Income Summary ……………………………. 260,000
Retained Earnings …………………… 260,000
PROBLEM 13-4A (Continued)
(b)
Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Feb. 1
Balance
J2
100,000
500,000
600,000
Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
350,000
Paid-in Capital in Excess of Par—Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Feb. 1
Balance
J2
20,000
75,000
95,000
Paid-in Capital in Excess of Par—Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
700,000
PROBLEM 13-4A (Continued)
Retained Earnings
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
300,000
(c) PECK CORPORATION
Stockholders’ equity
Paid-in capital
Capital stock
10% Preferred stock,
$50 par value,
20,000 shares authorized,
13,400 shares issued
Additional paid-in capital
In excess of par—
preferred stock ………………………. $118,000
In excess of par—
common stock ……………………….. 752,000
PROBLEM 13-5A
GALINDO CORPORATION
Stockholders’ equity
Paid-in capital
Capital stock
8% Preferred stock,
$50 par,
16,000 shares issued
and outstanding………………… $ 800,000
Total capital stock ………….. 2,800,000
Additional paid-in capital
In excess of par—
preferred stock …………………. $ 679,000
In excess of stated value—
common stock ………………….. 1,600,000
Total paid-in capital ………… 5,089,000
Retained earnings …………………………….. 1,748,000
Total paid-in capital and
retained earnings ………… 6,837,000