FrankSpeech Network Inc (FSBN)

[kolchakil0]

Sorry guys had to jump into this conversation since I have a degree in Accounting. I was mistaken by this amount also. Looks like if the FASB rules from 1999 still apply that the entry is reported in the equity or capital section of the Balance Sheet. Also if you read further down the stock subscription receibable is not reported as an asset because it is not tied to revenues or liabilities. Once the cash is collected the stock subscription receivable account is credited and cash is debited. So we will receive $3,700,000 but we will also issue more stock. Looks like more dilution. Just did a search on Yahoo "accounting for stock subscriptions receivable" to find this information.



Accounting 320B
Chapter 11: Equity Financing


Issuance of Capital Stock

Capital stock issued for cash
On June 1, 1999, the company issued 200,000 shares of $30 par value common stock for $6,400,000 cash.

Cash 6,400,000
Common stock 6,000,000
Paid-in capital in excess of par value 400,000

Capital stock sold on subscription
On November 15, 1999, the company received subscriptions for 20,000 shares of $30 par value common stock at $35 per share with 50% down payments. Remaining balance is due in 60 days.

Common stock subscriptions receivable 700,000
Common stock subscribed 600,000
Paid-in capital in excess of par 100,000

Cash 350,000
Common stock subscriptions receivable 350,000

On December 15, 1999, the subscribers of 10,000 shares paid the remaining balance in full and the company issued stock.

Cash 175,000
Common stock subscriptions receivable 175,000

Common stock subscribed 300,000
Common stock 300,000


Stockholders’ Equity Section of Balance Sheet, December 31, 1999

Stockholders’ Equity
Contributed capital:
Common stock, $30 par value, 100,000 shares authorized, 10,000 shares issued and outstanding

300,000
Common stock subscribed, 10,000 shares 300,000
Paid-in capital in excess of par value 100,000 $700,000
Less: Common stock subscriptions receivable (175,000)
Total Contributed Capital $525,000
Capital stock subscriptions receivable is not shown as an asset.
Capital stock subscriptions receivable is subtracted from stockholders’ equity section.