question archive City Publishing was recently organized
City Publishing was recently organized
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City Publishing was recently organized. The company issued common stock to an attorney who provided legal services worth $17,000 to help organize the corporation. City Publishing also issued common stock to an inventor in exchange for his patent with a market value of $64,000. In addition, City received cash both for the issuance of 5,000 shares of its preferred stock at $70 per share and for the issuance of 16,000 of its common shares at $5 per share. During the first year of operations, City Publishing earned net income of $74,000 and declared a cash dividend of $26,000. Without making journal entries, determine the total paid-in capital created by these transactions.
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Paid-in capital consists of: |
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Issued common stock for legal services......................................... |
$ 17,000 |
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Issued common stock for patent................................................ |
64,000 |
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Issued preferred stock (5,000 shares × $70).................................. Issued common stock for cash (16,000 shares × $5)................. |
350,000 80,000 |
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Total paid-in capital.................................................................. |
$511,000 |
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Unused data:
Net income
Dividends declared
