Question

The following information is from Princeton Company’s comparative balance sheets. At December 31 Current Year Prior Year Common stock, $10 par value $ 115,000 $ 112,000 Paid-in capital in excess of par 579,000 348,000 Retained earnings 325,500 299,500 The company’s net income for the current year ended December 31 was $54,000. 1. Complete the T-accounts to calculate the cash received from the sale of its common stock during the current year.

Answer 1

Answer:

Explanation:

Common Stock

                            Debit                           Credit

To ending balance $115,000.00 By Beginning balance $112,000.00

                                                               By Cash Received         $3,000.00

Total $115,000.00                         Total                         $115,000.00

Paid-in capital in excess of par

                        Debit                                        Credit

To ending balance $579,000.00 By Beginning balance $348,000.00

                                                               By Cash Received         $231,000.00

Total $579,000.00                         Total                         $579,000.00

Therefore, Cash received from issue of common stock = $3,000 + $231,000 = $234,000