Hayslett

ANSWER KEY

Problem 12-1A

(a) Jan. 10 Dr. Cash (100,000 X $3) Dr. 300,000

Cr. Common Stock (100,000 X $2) Cr. 200,000

Cr. Paid-in Capital in Excess of

  Stated Value—Common

  Stock (100,000 X $1) Cr. 100,000

Mar.  1 Dr. Cash (10,000 X $55) Dr. 550,000

Cr. Preferred Stock (10,000 X $50) Cr. 500,000

Cr. Paid-in Capital in Excess of

  Par Value—Preferred Stock Cr. 50,000

  (10,000 X $5)

Apr.  1 Dr. Land   Dr. 85,000

Cr. Common Stock (25,000 X $2) Cr. 50,000

Cr. Paid-in Capital in Excess of

  Stated Value—Common

  Stock ($85,000 – $50,000) Cr. 35,000

May  1 Dr. Cash (75,000 X $4) Dr. 300,000

Cr. Common Stock (75,000 X $2) Cr. 150,000

Cr. Paid-in Capital in Excess of

  Stated Value—Common

  Stock (75,000 X $2) Cr. 150,000

Aug.  1 Dr. Organization Expense   Dr. 50,000

Cr. Common Stock (10,000 X $2) Cr. 20,000

Cr. Paid-in Capital in Excess of

  Stated Value—Common

  Stock ($50,000 – $20,000) Cr.  30,000

Sept.  1 Dr. Cash (5,000 X $6)   Dr. 30,000

Cr. Common Stock (5,000 X $2) Cr. 10,000

Cr. Paid-in Capital in Excess of

  Stated Value—Common

  Stock (5,000 X $4) Cr. 20,000

Nov. 1 Dr. Cash (2,000 X $58) Dr. 116,000

Cr. Preferred Stock (2,000 X $50) Cr. 100,000

Cr. Paid-in Capital in Excess of

  Par Value—Preferred Stock Cr. 16,000

  (2,000 X $8)

(b)

Preferred Stock

|Date | |Explanation | |Ref. | |Debit | |Credit | |Balance |

|Mar. 1 | | | |J1 | | | |500,000 | |500,000 |

|Nov. 1 | | | |J1 | | | |100,000 | |600,000 |

Common Stock

|Date | |Explanation...