Question

​May, Inc. had the following transactions in​ 2019, its first year of​ operations: bullet Issued 20 comma 000 shares of common stock. The stock has par value of $ 2.00 per share and was issued at $ 18.00 per share. bullet Issued 1 comma 200 shares of $ 160.00 par value preferred stock at par. bullet Earned net income of $ 38 comma 000. bullet Paid no dividends. At the end of​ 2019, what is the total amount of paidminusin ​capital?

Answer 1

Answer:

The total amount of paid-in ​capital is $552,000

Explanation:

The computation of the total amount of paid-in capital is shown below:

= Issue of common stock + issue of preferred stock

where,

Issue of common stock = Number of shares × issued price

                                       = 20,000 shares × $18 per share

                                      = $360,000

Issue of preferred stock = Number of shares × par value

                                       = 1,200 shares × $160 per share

                                       = $192,000

Now put these values to the above formula  

So, the value would equal to

= $360,000 + $192,000

= $552,000