Answer:
option (c) $1,365,000
Explanation:
Given;
Number of shares issued = 200,000
Par value of the common stock = $5
Market value of the common stocks= $12
Legal and consulting fees = $110,000
Registration and issuance costs for the common stock = $35,000
Now,
The par value of the stocks
= Number of shares issued × Par value of the stocks
on substituting the respective values, we have
= 200,000 × $5
= $1,000,000
and, the Market value of the stocks
= Number of shares issued × Market value of the stocks
on substituting the respective values, we have
= 200,000 × $12
= $2,400,000
Therefore,
the net additional paid in cash
= Market value of the stocks - par value of the stocks - Registration and issuance costs
on substituting the respective values, we have
= $2,400,000 - $1,000,000 - $35,000
= $1,365,000
The legal and the consulting fees is not included above because they are paid in cash.
Hence, the correct answer is option (c) $1,365,000
