Sunland Corporation was organized on January 1 2017 with aut

Sunland Corporation was organized on January 1, 2017, with authorized capital of 506000 shares of $10 par value common stock. During 2017, Sunland issued 30900 shares at $11 per share, purchased 4100 shares of treasury stock at $12 per share, and sold 4100 shares of treasury stock at $14 per share. What is the amount of additional paid-in capital at December 31, 2017? O $30900 $39100 O $8200

Solution

1 Answer is A) 39000 The assessee had issued shares @ 11 i.e, $1 in excess of face value hence, additional paid up capital on issue of shares will be 30900shares*$1 = $39,000 There will be no additional paid in capital at the time of sale/purchase of treasury stock. 2 Common Stock 105000 (21000 stock, $5) Preferred Stock 49000 7%, 4900 stock @ $10 The preferred stock is noncumulative therefore, dividend not paid in 2016 will not be included in 2017 dividend Preferred Dividend = 4,900 shares x $10 par value x 7% dividend = $3430