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Anuta_ua [19.1K]
3 years ago
6

The corporate charter of Andromeda Co. authorized the issuance of 21 million, $1 par common shares. During 2021, its first year

of operations, Andromeda had the following transactions: January 1 sold 6 million shares at $26 per share June 3 purchased 13 million shares of treasury stock at $29 per share December 28 sold the 4 million shares of treasury stock at $31 per share What amount should Andromeda report as additional paid-in capital in its December 31, 2021, balance sheet
Business
1 answer:
Free_Kalibri [48]3 years ago
6 0

Answer:

$158 million

Explanation:

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

Paid in capital in excess of par value-Common Stock = ($26 - 1) × 6 million

= 25 × 6 million

= $150 million

Paid in capital from sale of treasury Stock = ($31 - $29) × 4 million

= $8 million

Total additional paid in capital = Paid in capital in excess of par value-Common Stock + Paid in capital from sale of treasury Stock

= $150 million + $8 million

= $158 million

So, for computing the total additional paid in capital we simply applied the above formula.

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