Problem - Nilson Company is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders' equity during its first year of operations.
a. Cash................................................................ 60,000
Common stock, $1 Par Value................. 1,500
Paid-In Capital in Excess of
Par Value, Common Stock..................... 58,000
b. Organization Expenses................................ 20,000
Common stock, $1 Par Value................. 500
Paid-In Capital in Excess of
Par Value, Common Stock..................... 19,500
c. Cash................................................................. 6,650
Accounts Receivable........................................ 4,000
Building.............................................................. 12,500
Notes Payable................................... 3,150
Common Stock, $1 Par Value........ 450
Paid-In Capital in Excess of
Par Value, Common Stock........... 19,600
d. Cash................................................................ 30,000
Common Stock, $1 Par Value................. 600
Paid-In Capital Excess of
Par Value, Common Stock............ 29,400
REQUIRED
1. Explain the transaction(s) underlying each journal entry (a) through (d).
2. How many shares of common stock are outstanding at year-end?
3. What is the amount of minimum legal capital (based on par value) at year-end?
4. What is the total paid-in capital at year-end?
5. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equal $141,500?