Swifty's total paid-in capital was $57319000.
The key to this problem is to recognize that when companies purchase their own shares and hold them for future use , the stock is called treasury stock. Treasury Record is recorded at the dollar amount paid for the stock.Treasury Stock is the contra stockholder's equity account.It has a debit balance while most stockholder's equity accounts have credit balances.
Total Stockholder's equity calculation
Preferred stock ⇒ $440000
Common stock ⇒ $19500000
Paid-in capital in excess of par-preferred stock ⇒ $64000
Paid-in capital in excess of par-common stock ⇒ $ 28300000
Retained Earning⇒ $9750000
Treasury Stock (35000 Shares )⇒ $-735000
Total paid-in capital ⇒ $57319000
Therefore, Swifty's total paid-in capital was $57319000.
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Swifty Corporation's December 31, 2020 balance sheet showed the following:
6% preferred stock, $20 par value, cumulative, 35000 shares authorized;
22000 shares issued $440000
Common stock, $10 par value, 3,000,000 shares authorized;
1,950,000 shares issued, 1,920,000 shares outstanding 19500000
Paid-in capital in excess of par value -preferred stock 64000
Paid-in capital in excess of par value-common stock 28300000
Retained earnings 9750000
Treasury stock (35000 shares) 735000
Swifty's total stockholders' equity was
- $606610.
- $58789000.
- $57319000.
- $47879000.
