Question

The following information is from Princeton Company's comparative balance sheets.

At December 31 Current year Priro year
Common stock, $10 par value $124,000 118,000
Paid—in capital in excess of par 585,000 351,000
Retained earnings 331,500 305,500

The company's net income for the current year ended December 31 was $57,000.

Required:
Write down the T-accounts to calculate the cash received from the sale of its common stock during the current year.

Answer 1

cash received = $ 240,000

Step-by-step explanation:

On calculating the common stock $10 par

Beg. balance - $ 118,000

$6,000 - Issuance of common stock

Thus the ending balance = $124,000

On calculating the paid in capital in excess of par

Beg. balance - $ 351,000

$ 234,000 - Issuance of common stock

Thus the end balance - $ 585,000

Therefore,

The cash received - $ 240,000