Question

Caradonna Company has 100,000 shares of $5 par common stock issued and outstanding as of January 1, year 8. The shares were originally issued for $22 per share. On February 3, year 8, Caradonna repurchased 5,000 shares at $19 per share for the purposes of retiring them. On April 10, year 8, Caradonna repurchased an additional 2,000 shares at $25 per share. No other transactions involving common stock occurred during the year. What will be the balance in additional paid in capital from retired stock as a result of those transactions?

Answer 1

$9,000

Step-by-step explanation:

Common Stock Add. Paid in Capital

Additional Paid in capital on $35,000 $119,000

issued of 7000 Shares (7,000*$5) (7,000*$17)

Total Amount collected in $119,000

additional paid in capital (A)

Repurchase 5000 Shares at $19 $25,000 $70,000

(5000*5) (5,000*14)

Repurchase 2000 Shares at $25 $10,000 $40,000

(2000*5) (2,000*20)

Total Amount Paid on Additional $110,000

Paid in capital (B)

Balance in Additional paid in Capital (A-B) $9,000