Question

As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients. 1. Swifty Corporation is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land by issuing 3,000 shares of its $20 par value common stock. The owners' asking price for the land was $124,000, and the fair value of the land was $115,000. 2. Crane Company is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired land by issuing 19,500 shares of its $10 par value stock. At the time of the exchange, the land was advertised for sale at $271,500. The stock was selling at $11 per share. Prepare the journal entries for each of the situations above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts) No. Date Account Titles and Explanation Debit Credit 1. Dec. 5 Land 124000 Common Stock Paid-in Capital in Excess of Par-Common Stock 2. June 1 Land Common Stock Paid-in Capital in Excess of Par-Common Stock

          As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients.
1. Swifty Corporation is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired
land by issuing 3,000 shares of its $20 par value common stock. The owners' asking price for the land was $124,000, and the
fair value of the land was $115,000.
2. Crane Company is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired
land by issuing 19,500 shares of its $10 par value stock. At the time of the exchange, the land was advertised for sale at
$271,500. The stock was selling at $11 per share.
Prepare the journal entries for each of the situations above. (Credit account titles are automatically indented when amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts)
No. Date Account Titles and Explanation Debit Credit
1. Dec. 5 Land 124000
Common Stock
Paid-in Capital in Excess of Par-Common Stock
2. June 1 Land
Common Stock
Paid-in Capital in Excess of Par-Common Stock

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As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients.
1. Swifty Corporation is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired
land by issuing 3,000 shares of its 20 par value common stock. The owners' asking price for the land was124,000, and the
fair value of the land was 115,000.
2. Crane Company is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired
land by issuing 19,500 shares of its10 par value stock. At the time of the exchange, the land was advertised for sale at
271,500. The stock was selling at11 per share.
Prepare the journal entries for each of the situations above. (Credit account titles are automatically indented when amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts)
No. Date Account Titles and Explanation Debit Credit
1. Dec. 5 Land 124000
Common Stock
Paid-in Capital in Excess of Par-Common Stock
2. June 1 Land
Common Stock
Paid-in Capital in Excess of Par-Common Stock

Added by Rocio G.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

07/10/2023

Step 1

Step 1: For Swifty Corporation, the journal entry is as follows: Date: December 5 Land: $124,000 (Debit) Common Stock: $60,000 (Credit) Paid-in Capital in Excess of Par-Common Stock: $64,000 (Credit) Show more…

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As an auditor for the CPA firm of Hinkson and Caivert, you encounter the following situations in auditing different clients. Swifty Corporation is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land by issuing 3,000 shares of its $20 par value common stock. The owner's asking price for the land was $124,000 and the fair value of the land was $115,000. Crane Company is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired land by issuing 25,000 shares of its $10 par value common stock. The stock was selling at $11 per share. Prepare the journal entries for each of the situations above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter "0" for the amount.) Journal Entries: Swifty Corporation: Date: December 5 Land: $124,000 Common Stock: $60,000 Paid-in Capital in Excess of Par-Common Stock: $64,000 Crane Company: Date: June 1 Land: $271,500 Common Stock: $250,000 Paid-in Capital in Excess of Par-Common Stock: $21,500

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Transcript

00:02 To prepare the paid -in capital section of stockholder equity at december 31, 2022.

00:10 So, to prepare the paid -in capital section of stockholder's equity or stockholder's equity at december 31, 2022.

00:47 So, for this we need to analyze the stock transaction and update the respective equity accounts.

00:52 Let's calculate the paid -in capital for each type of stock.

00:57 So, first is the preferred stock.

01:08 Jan 10, no transaction for the preferred stock.

01:14 No transaction.

01:18 March 1, issued 5 ,000 shares of preferred stock for cash at $1 .10 per share.

01:29 5 ,000 shares at $1 .10 per share.

01:39 Paid -in capital in excess of par minus preferred stock equals to 5 ,000 shares into 110 minus paid -in capital in excess of par minus preferred stock equals to 5 ,000 shares into $1 .10 minus 5 ,000 shares into $100 par value.

02:39 Paid -in capital in excess of par minus preferred stock equals to $50 ,000.

03:02 Common stock, jan 10, issued 790 ,000 shares for cash at $4 per share.

03:44 Common stock equals to 79 ,000 shares into $2 stated value.

04:01 Common stock equals to $1 ,58 ,000.

04:14 So, paid -in capital minus common stock, paid -in capital in excess of stated value minus common stock equals to paid -in capital in excess of stated value equals to minus common stock which is equals to $1 ,58 ,000.

06:09 So, april 1, issued 23 ,500 shares of common stock for land.

06:43 The fair value of the land was land value equals to $87 ,500.

06:55 Common stock equals to 23 ,000, $2 stated value.

07:16 Common stock equals to $47 ,000.

07:32 Paid -in capital in excess of stated value minus common stock equals to, which is equals to $87 ,500 minus $47 ,000, which comes out to be $40 ,500...

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