Question

A company issued 30 shares of $.50 par value common stock for $12,000. The credit to additional paid-in capital would be ________.
A. $1.985.
B. $12,000.
C. $15.
D. $10,150.

Answer 1

Answer: $11,985

Explanation:

The credit to the Additional paid-in capital is the excess over the pa value of the stock that was sold. The formula is therefore:

Additional paid-in capital = Cash stock was sold for - Par value of stock

Par value of stock = 30 shares * 0.50

= $15.00

Additional paid-in capital = 12,000 - 15

= $11,985