SOLUTIONS TO EXERCISES

EXERCISE 15-1 (15-20 minutes)

(a) Jan. 10 Cash (80,000 X $6) 480,000 Common Stock (80,000 X $5) 400,000 Paid-in Capital in Excess of Par 80,000

Mar. 1 Organization Expense 35,000 Common Stock (5,000 X $5) 25,000 Paid-in Capital in Excess of Par 10,000 (Note: In the past, these costs would have been charged to Organiza¬tion Costs)

July 1 Cash (30,000 X $8) 240,000 Common Stock (30,000 X $5) 150,000 Paid-in Capital in Excess of Par 90,000

Sept. 1 Cash (60,000 X $10) 600,000 Common Stock (60,000 X $5) 300,000 Paid-in Capital in Excess of Par (60,000 X $5) 300,000
(b) Jan. 10 Cash (80,000 X $6) 480,000 Common Stock (80,000 X $3) 240,000 Paid-in Capital in Excess of Stated Value 240,000

Mar. 1 Organization Expense 35,000 Common Stock (5,000 X $3) 15,000 Paid-in Capital in Excess of Stated Value 20,000

July 1 Cash (30,000 X $8) 240,000 Common Stock (30,000 X $3) 90,000 Paid-in Capital in Excess of Stated Value 150,000

Sept. 1 Cash (60,000 X $10) 600,000 Common Stock (60,000 X $3) 180,000 Paid-in Capital in Excess of Stated Value 420,000

EXERCISE 15-2 (15-20 minutes)

Jan. 10 Cash (80,000 X $5) 400,000 Common Stock (80,000 X $1) 80,000 Paid-in Capital Excess of SV – Common 320,000

Mar. 1 Cash (5,000 X $108) 540,000 Preferred Stock (5,000 X $100) 500,000 Paid-in Capital in Excess of PV - Preferred 40,000

April 1 Land 80,000 Common Stock (24,000 X $1) 24,000 Paid-in Capital in Excess of SV - Common 56,000

May 1 Cash (80,000 X $7) 560,000 Common Stock (80,000 X $1) 80,000 Paid-in Capital in Excess of SV - Common 480,000

Aug. 1 Organization Expense* 50,000 Common Stock (10,000 X $1) 10,000 Paid-in Capital in Excess of SV -