If 10,000 shares with par value of $15/share are issued for $20/share,how much will be presented as "common shares" for financial statement purposes?
A)$10,000
B)$50,000
C)$150,000
D)$200,000

Question

Quizplus · Accepted Answer

The total amount received from the issuance of 10,000 shares at $20/share is $200,000. The par value of the shares is $15/share, so the total par value of the shares is $150,000. The difference between the total amount received and the total par value is $50,000, which represents the amount in excess of par value that is recorded as Additional Paid-In Capital. Therefore, the amount presented as common shares on the financial statements is $150,000.

If 10,000 Shares with Par Value of $15/share Are Issued