Question

How to compute additional paid-in capital?

1) Common Stock / Par Value
2) Issued price of common stock - face-value (or par value) * shares issued
3) Net Cash - Par value * common stock
4) Net Cash + Par value / Common Stock

Answer 1

To compute additional paid-in capital, you can use the formula Common Stock / Par Value or the formula Issued price of common stock - face-value * shares issued. An example calculation is provided.

Step-by-step explanation:

The formula to compute additional paid-in capital is:

1. Common Stock / Par Value
2. Issued price of common stock - face-value (or par value) * shares issued
3. Net Cash - Par value * common stock
4. Net Cash + Par value / Common Stock

Example:

If a company issues 1,000 shares of common stock with a par value of $10 and sells them for $15 per share, then the additional paid-in capital is calculated as follows:

(Issued price of common stock - par value) * shares issued = ($15 - $10) * 1,000 = $5,000.