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Stockholders Equity

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Western Atlantic Corporation recently lost some of its accounting records in a fire on August 10, 2006. The following information has been salvaged from the rubble:

The $100 par value, preferred stock account has a balance of $289,000. The $50 par value, common stock was issued for an average price of $55 per share. The Paid in Capital in Excess of Par Value Preferred account has a balance of $28,900. There are 40,000 shares of common stock issued. The Retained Earnings account has a balance of $185,000 on August 10, 2006.

Required: a. Determine the number of shares of preferred stock issued. Show your calculations. b. What is the balance in the Common Stock account? Show your calculations. c. Determine the balance in the Pre-Paid in Capital in Excess of Par Value-Common account.Show your calculations. d. What is total paid-in capital? Show your calculations. e. What is the total stockholder's equity? Show your calculations.

(I am guessing that the number of shares of preferred stock are 289. The common stock account is 40,000 times $55? Not sure where to go from there?)

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Solution Summary

The solution explains various calculations relating to stockholders equity accounts.

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a. Determine the number of shares of preferred stock issued. Show your calculations.

The total amount in preferred stock is 289,000 and the par value is $100. The number of shares issued is 289,000/100=2,890

b. What is the balance in the Common Stock account? Show your calculations.

The average issue price is $55 ...

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