Exercise 8-4

Effect of issuing common stock on the balance sheet Newly formed Electronics Services Corporation has 100,000 shares of $10 par common stock authorized. On March 1, 2014, Electronics Services issued 20,000 shares of the stock for $12 per share. On May 2 the company issued an additional 30,000 shares for $15 per share. Electronics Services was not affected by other events during 2014. Required a.Record the transactions in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event. b.Determine the amount Electronics Services would report for common stock on the December 31, 2014, balance sheet. c.Determine the amount Electronics Services would report for paid-in capital in excess of par. Page 315