Question

Presented below is information related to Hale Corporation: Common Stock, $1 par $3,500,000 Paid-in Capital in Excess of Par—Common Stock 550,000 Preferred 8 1/2% Stock, $50 par 2,000,000 Paid-in Capital in Excess of Par—Preferred Stock 400,000 Retained Earnings 1,500,000 Treasury Common Stock (at cost) 150,000 What is the total Paid-in Capital (i.e., cash collected) from Common Stock of Hale Corporation?

Answer 1

Answer:

$4,050,000

Explanation:

Cash collected from the common stock holders include the common stock at par and Paid-in Capital in Excess of Par Common Stock. When stocks are issued over the par value of the stock. The amount excess of par value is credited to the Paid-in Capital in Excess of Par Common Stock account.

Common Stock, $1 par $3,500,000

Paid-in Capital in Excess of Par—Common Stock 550,000

Total cash received from common stockholders = $3,500,000 + 550,000

Total cash received from common stockholders = $4,050,000