Martin Corporation was organized on January 3, 2007. Martin was authorized to is

Question

Martin Corporation was organized on January 3, 2007. Martin was authorized to issue 50,000 shares of common stock with a par value of $10 per share. On January 4, Martin issued 30,000 shares of common stock at $25 per share. On July 15, Martin issued an additional 10,000 shares at $20 per share. Martin reported income of $33,000 during 2007. In addition, Martin declared a dividend of $.50 per share on December 31,2007.
What is the amount reported on Martin corporation's December 31, 2007 balance sheet as additional paid-in capital was
a. $400,000
b. $550,000
c.$563,000
d.$950,000

Explanation / Answer

additional paid-in capital is the amount paid in excess of the par value 30,000 * (25 - 10) + 10,000 * (20 - 10 ) = 550,000 - B

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