Question

On April 1, year 1, Hyde Corp., a newly formed company, had the following stock issued and outstanding:

Answer 1

Answer:

Common stock $20,000

Preferred stock $60,000

APIC $820,000

Explanation

Calculation to determine what Hyde's April 1, year 1 statement of stockholders' equity should report

Calculation to determine the COMMON STOCK

Common stock=20,000 shares*$1

Common stock=$20,000

Calculation to determine PREFERRED STOCK

Preferred stock =6,000 shares*$10

Preferred stock =$60,000

Calculation to determine ADDITIONAL PAID-IN CAPITAL (APIC)

APIC=[(6000*$50)-(6000*$10)]+[(20,000*$30)+(20,000*$1)]

APIC=($300,000-$60,000)+($600,000-$20,000)

APIC=$240,000+$580,000

APIC=$820,000

Therefore Hyde's April 1, year 1 statement of stockholders' equity should report:

Common stock $20,000

Preferred stock $60,000

APIC $820,000