Question

The following accounts and their balances were selected from the unadjusted trial balance of Point Loma Group Inc., a freight forwarder, at October 31, the end of the current fiscal year:
1 Common Stock, no par, $14 stated value
$4,480,000.00
2 Paid-In Capital from Sale of Treasury Stock
45,000.00
3 Paid-In Capital in Excess of Par-Preferred Stock
210,000.00
4 Paid-In Capital in Excess of Stated Value-Common Stock
480,000.00
5 Preferred 2% Stock, $120 par
8,400,000.00
6 Retained Earnings
39,500,000.00
Prepare the Paid-In Capital portion of the Stockholders’ Equity section of the balance sheet using Method 1 of
Exhibit 7
. There are 375,000 shares of common stock authorized and 85,000 shares of preferred stock authorized. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Answer 1

Answer:

Loma Group Inc.

Paid-in Capital Portion of the Stockholders' Equity:

Common Stock, 320,000 issued at $14 stated value

,   $4,480,000.00

Paid-In Capital in Excess of Stated Value-Common Stock  525,000.00

Preferred 2% Stock, $120 par                                            8,400,000.00

Paid-In Capital in Excess of Par-Preferred Stock                  210,000.00

Total Paid-in Capital                                                        $13,615,000.00

Explanation:

a) The Paid-In Capital in Excess of Stated Value-Common Stock:

As per trial balance       $480,000.00

Treasury Stock                  45,000.00

Total                              $525,000.00

b) The Paid-in Capital of the Stockholders' Equity is the element of Stockholders' Equity that includes only the paid-in capital (cash and other assets) received from stockholders.  This portion excludes the Retained Earnings and the memorandum record of the authorized share capitals.