Question

Poodle Corporation was organized on January 3, 2021. The firm was authorized to issue 83,000 shares of $5 par common stock. During 2021, Poodle had the following transactions relating to shareholders' equity: Issued 26,000 shares of common stock at $6.40 per share. Issued 23,000 shares of common stock at $9.30 per share. Reported net income of $110,000. Paid dividends of $50,000. What is total paid-in capital at the end of 2021

Answer 1

$380,300

Step-by-step explanation:

Paid-in-capital is the amount of cash received from the investors of the company for issuance of stocks. Paid-in-capital is recorded for both common and preferred stock separately. The value st par is recorded separately from the value excess of par of each stock type.

Issue of stock

first issuance

Common stock = 26,000 shares x $5 = $130,000

Add-in capital excess of par- Common shares = 26,000 shares x ( $6.4 - $5 )

Add-in capital excess of par- Common shares = $36,400

second issuance

Common stock = 23,000 shares x $5 = $115,000

Add-in capital excess of par- Common shares = 23,000 shares x ( $9.3 - $5 )

Add-in capital excess of par- Common shares = $98,900

Total Paid-in-capital = ($130,000 + $36,400) + ($115,000 + $98,900)

Total Paid-in-capital = $166,400 + $213,900 = $380,300