Question

Clothing Emporium was organized on January 1, 2021. The firm was authorized to issue 140,000 shares of $8 par value common stock. During 2021, Clothing Emporium had the following transactions relating to stockholders' equity: Issued 42,000 shares of common stock at $10 per share. Issued 28,000 shares of common stock at $11 per share. Reported a net income of $140,000. Paid dividends of $70,000. What is total paid-in capital at the end of 2021

Answer 1

Answer:

$728,000

Explanation:

Paid in capital can be described as the payments ac company received in exchange for its stock from investors.

From the question, the total paid in capital can be calculated as follows:

Receipt for 42,000 shares at $10 per share = 42,000 * 10 = $420,000

Receipt for 28,000 shares at $11 per share = 28,000 * 11 = $308,000

By adding the two above together and have:

Total paid-in capital = $420,000 + $308,000 = $728,000.

Therefore, total paid-in capital at the end of 2021 is $728,000.