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3 years ago

Witt Corporation received its charter during January of this year. The charter authorized the following stock:

Business

1 answer:

damaskus [11]3 years ago

5 0

Answer:

Stockholders' Equity = $735,000

Explanation:

This can be prepared as follows:

Witt Corporation

Stockholders' Equity Section of the Balance Sheet

At December 31, 2011

Details Amount ($)

Common stock (w.1) 344,000

Preferred stock (w.2) 65,000

Additional paid in capital - Common stock (w.3) 181,000

Additional paid in capital - Preferred stock (w.4) 49,000

Net income 96,000

Stockholders' Equity  735,000 

Workings:

w.1. Common stock = (Number of common shares issued in transaction a + Number of common shares issued in transaction c) * Par value of common stock = (40,000 + 3,000) * $8 = $344,000

w.2. Preferred stock = (Number of preferred shares issued in transaction b + Number of preferred shares sold in transaction c) * Par value of preferred stock = (5,500 + 1,000) * $10 = $65,000

w.3. Additional paid in capital - Common stock = (Number of common shares issued in transaction a * (Selling price per share of the transaction - Par value of common stock)) + (Number of common shares issued in transaction c * (Selling price per share of the transaction - Par value of common stock)) = (40,000 * ($12 - $8)) + (3,000 * ($15 - $8)) = $181,000

w.4. Additional paid in capital - Preferred stock = (Number of preferred shares issued in transaction b * (Selling price per share of the transaction - Par value of preferred stock)) + (Number of preferred shares issued in transaction c * (Selling price per share of the transaction - Par value of preferred stock)) = (5,500 * ($16 - $10)) + (1,000 * ($26 - $10)) = $49,000

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3 years ago

Suppose first main street bank, second republic bank, and third fidelity bank all have zero excess reserves. the required reserv

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Complete Question:

Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 20%. Hubert, a client of First Main Street Bank, deposits $1,500,000 into his checking account at First Main Street Bank.

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Answer:

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