Sosa Co.\'s stockholders\' equity at January 1, 2010 is as follows: Common stock

Question

Sosa Co.'s stockholders' equity at January 1, 2010 is as follows:




Common stock, $10 par value; authorized 300,000 shares;





Outstanding 225,000 shares

$2,250,000



Paid-in capital in excess of par

900,000



Retained earnings

2,190,000



Total

$5,340,000


During 2010, Sosa had the following stock transactions:

Acquired 6,000 shares of its stock for $270,000.
3,600 treasury shares at $50 a share.
Sold the remaining treasury shares at $41 per share.

No other stock transactions occurred during 2010. Assuming Sosa uses the cost method to record treasury stock transactions, the total amount of all additional paid-in capital accounts at December 31, 2010 is:


a) $870,000.


b) $891,600.


c) $908,400


d) $927,600.

Explanation / Answer

answer is C
given

Acquired 6,000 shares of its stock for $270,000.
3,600 treasury shares at $50 a share.
Sold the remaining treasury shares at $41 per share

Assuming Sosa uses the cost method to record treasury stock transactions, the total amount of all additional paid-in capital accounts at December 31, 2010 is:

as additional paid in capital is exess of par $900,000

so by calculating we get as $908,400

so answer is C

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