Racer Corporation's December 31, 2014 balance sheet showed the following:8% preferred stock, $20 par value, cumulative, 40,000 shares authorized; 20,000 shares issued $ 400,000Common stock, $10 par value, 4,000,000 shares authorized; 2,600,000 shares issued, 2,560,000 shares outstanding 26,000,000Paid-in capital in excess of par value - preferred stock 80,000Paid-in capital in excess of par value - common stock 36,000,000Retained earnings 10,200,000Treasury stock (40,000 shares) 840,000Racer's total paid-in capital wasa. $62,480,000. b. $63,320,000. c. $61,640,000. d. $36,080,000.

Question

Christina Herrera

Business

26 April, 15:31

Racer Corporation's December 31, 2014 balance sheet showed the following:8% preferred stock, $20 par value, cumulative, 40,000 shares authorized; 20,000 shares issued $ 400,000Common stock, $10 par value, 4,000,000 shares authorized; 2,600,000 shares issued, 2,560,000 shares outstanding 26,000,000Paid-in capital in excess of par value - preferred stock 80,000Paid-in capital in excess of par value - common stock 36,000,000Retained earnings 10,200,000Treasury stock (40,000 shares) 840,000Racer's total paid-in capital wasa. $62,480,000. b. $63,320,000. c. $61,640,000. d. $36,080,000.

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Answers (1)

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Silas Payne · Answer 1

a. $62,480,000

Explanation:

The computation of the total paid in capital is shown below:

= Issued shares + outstanding shares + Paid-in capital in excess of par value - preferred stock + Paid-in capital in excess of par value - common stock

=$400,000 + $26,000,000 + $80,000 + $36,000,000

= $62,480,000

The retained earning, and the treasury stock should not be included inpaid-in capital. Hence, these items would be ignored.