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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Amlin Corporation was incorporated on January 1, 2019, with the following authorized capitalization:

  • 20,000 shares of common stock, no-par value, stated value $40 per share
  • 5,000 shares of 5% cumulative preferred stock, par value $ 10 per share

During 2019, Amlin issued 12,000 shares of common stock for a total of $600,000 and 3,000 shares of preferred stock at $16 per share. In addition, on December 21, 2019, subscriptions for 1,000 shares of preferred stock were taken at a purchase price of $17. These subscribed shares were paid for on March 4, 2020. What should Amlin report as total contributed capital on its December 31, 2019, balance sheet issued on February 1,2020?

  1. a. $520,000
  2. b. $648,000
  3. c. $665,000
  4. d. $850,000

To determine

Identify the total contributed capital that should be reported on Corporation A’s balance sheet as on December 31, 2019 issued on February 1, 2020.

Explanation

Total contributed capital: Total contributed capital is the total amount of cash or assets received by company from the shareholders’ in exchange for the issue of shares. It is also referred as paid-in capital.

Compute the contributed capital of Corporation A as on December 31, 2019.

Total Contributed capital = {Issue of 12,000 common shares + Issue fo 3,000 preferred sahres at $16 per share}=$600,000

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