Question

An analysis of stockholders' equity of Hahn Corporation as of January 1, 2020, is as follows: Common stock, par value $20; authorized 100,000 shares; issued and outstanding 90,000 shares $1,800,000 Additional Paid-in capital 900,000 Retained earnings 760,000 Total $3,460,000 During 2020, the company entered into the following transactions: Acquired 2,500 shares of its stock for $75,000. Sold 2,000 treasury shares at $35 per share. Sold the remaining treasury shares at $20 per share. Assuming no other equity transactions occurred during 2020, what should Hahn report at December 31, 2020, as total additional paid-in capital?

Answer 1

Answer:

$905,000

Explanation:

Calculation to determine what should Hahn report at December 31, 2020, as total additional paid-in capital

Total Additional Paid-in capital=$900,000 + (2,000 × $5) –[(2,500-2,000)× $10]

Total Additional Paid-in capital=$900,000 + (2,000 × $5) – (500 × $10)

Total Additional Paid-in capital=$900,000 + $10,000-$5,000

Total Additional Paid-in capital = $905,000

Therefore The amount that Hahn should report at December 31, 2020, as total additional paid-in capital is $905,000