Accounting homework help?

Posted on 2014-04-15 07:02:00 in Accounting by TERRI

When Langston Corporation was formed on January 1, 20x5, the corporate charter provided for 100,000 shares of $10 par value common stock. The following transactions were among those engaged in by the corporation during its first month of operation:



1. The corporation issued 400 shares of stock to its lawyer in full payment of the $10,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency.

2. The company issued 16,000 shares of stock at a price of $50 per share.

3. The company issued 14,000 shares of stock in exchange for equipment that had a fair market value of $320,000.



The entry to record transaction 3 is:

a Equipment 320,000

Common Stock 320,000

b Common Stock 140,000

Equipment 140,000

c Equipment 140,000

Common Stock 140,000

d Equipment 320,000

Common Stock 140,000

Additional Paid-in Capital 180,000



On May 1, 20x5, Ironwood Corporation had 200,000 shares of $10 par value common stock outstanding with a market value of $16 per share. On May 2, 20x5, Ironwood announced a 4-for-1 stock split. After the split, the par value of the stock

a) remained the same as before the split.

b) was reduced to $2.50 per share.

c) was reduced by $4 per share.

d) was reduced by $2.50 per share.

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