Just after its formation on September 1, 2016, the ledger accounts of the Supplies Unlimited, Inc., contained the following balances:
Accrued Expenses Payable ..................................... $ 10,000
Accounts Payable .................................................. 80,000
Accounts Receivable .............................................. 45,000
Allowance for Doubtful Accounts ............................... 4,000
Building ........................................................... 200,000
Cash ................................................................. 21,600
Common Stock ($20 par) ....................................... 240,000
Common Stock Subscribed ...................................... 60,000
Furniture and Fixtures ............................................ 50,000
Merchandise Inventory .......................................... 145,000
Notes Payable-Short Term ..................................... 50,000
Paid-in Capital in Excess of Par Value-Common ........... 27,600
Paid-in Capital in Excess of Par Value-Preferred ............ 6,000
Preferred Stock (10%, $50 par) .................................. 50,000
Preferred Stock Subscribed (10%, $50 par) .................... 20,000
Subscriptions Receivable-Common Stock ................... 66,000
Subscriptions Receivable-Preferred Stock ................... 20,000
The corporation is authorized to issue 100,000 shares of $20 par-value common stock and 20,000 shares of 10 percent, $50 par-value preferred stock (noncumulative and nonparticipating).
Instructions
1. Answer the following questions:
a. How many shares of common stock are outstanding?
b. How many shares of common stock are subscribed?
c. How many shares of preferred stock are outstanding?
d. How many shares of preferred stock are subscribed?
e. At what average price has common stock been subscribed or issued?
f. Assume that no dividends are paid in the first year of the corporation's existence. What are the rights of the preferred stockholders?
g. Assuming that all of the Paid-in Capital in Excess of Par Value-Common was applicable to the shares of common stock that have been subscribed but not yet issued, what was the subscription price per share of the common stock subscribed?
2. Prepare a classified balance sheet for the corporation just after its formation on September 1, 2016.
Analyze: What is the current ratio for the corporation at September 1, 2016?