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Accounting Problems

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Accounting problems: stock value, paid-in capital, treasury stock. See attachment for accounting problems.

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Solution Summary

This problem looks at several different accounting problems. The topics involve stock value, paid-in capital, treasury stock, and preferred stock dividends.

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Please see the attached file.
The common stock value on May 31, 2002 should be 200,000 * $6 = $1,200,000. This is the par value of the 200,000 shares issued.
Add up the numbers to get the total stockholder's equity of $20,520,000.

The increase in additional paid-in capital during May was $8,400,000 - $8,240,000 = $160,000.
The common stock par value entry increased by $60,000.
The total proceeds of the stock sale were thus $160,000 + $60,000 = $220,000.
The number of shares that were sold was equal to 200,000 - 190,000 = 10,000.
The price per share was thus: $220,000/10,000 = $22.

The increase ...

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