Question

Poodle Corporation was organized on January 3, 2011. The firm was authorized to issue 100,000

Answer 1

Answer:

C. $370,000

Explanation:

Poodle Corporation was organized on January 3, 2011. The firm was authorized to issue 100,000  shares of $5 par common stock.

During 2011, Poodle had the following transactions relating to  shareholders' equity:

Issued 30,000 shares of common stock at $7 per share.

Issued 20,000 shares of common stock at $8 per share.

Reported a net income of $100,000.

Paid dividends of $50,000.

Therefore total Paid-in capital at the end of 2011 is derived by :

(30,000 shares x $7) + (20,000 x $8) = $370,000

Paid - In capital refers to the funds that stockholders have invested through the purchase of stock from the issuing company, including premiums and not just par value.