Question

May, Inc. had the following transactions in 2019, its first year of operations: Issued 22,000 shares of common stock. The stock has par value of $2.00 per share and was issued at $15.00 per share. Issued 1,800 shares of $120.00 par value preferred stock at par. .Earned net income of $38,000. Paid no dividends. At the end of 2019, what is the total amount of paid- in capital? OA. $546,000 O B. $584,000 O C. $260,000 OD, $330,000

Answer 1

Answer:

The amount of paid-in capital        $

Common stocks (22,000 x $2)      44,000

Preferred stocks (1,800 x $120)     216,000

Amount of paid-in capital               260,000

The correct answer is C

Explanation:

The amount of paid-in capital is the total of paid-in capital of common stocks and paid-in capital of preferred stocks. The paid-in capital of each stock is computed as number of stock multiplied by par value of each stock.