Aruba Corporation recently organized. The company issued common stock to an inventor in exchange for a patent with a market value of $ 57 comma 000. In addition, Aruba received cash for 6 comma 000 shares of its $ 10 par preferred stock at par value and 6 comma 500 shares of its no-par common stock at $ 20 per share. Without making journal entries, determine the total paid-in capital created by these transactions.

Question

Business

Mario Harper

26 October, 03:12

Aruba Corporation recently organized. The company issued common stock to an inventor in exchange for a patent with a market value of $ 57 comma 000. In addition, Aruba received cash for 6 comma 000 shares of its $ 10 par preferred stock at par value and 6 comma 500 shares of its no-par common stock at $ 20 per share. Without making journal entries, determine the total paid-in capital created by these transactions.

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Answers (1)

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Joey Roth · Answer 1

The correct answer is $247,000.

Explanation:

According to the scenario, the computation of the given data are as follows:

Common stock in patent exchange = $57,000

Preferred stock value = 6,000 shares * $10 = $60,000

Common stock issued at $20 = 6,500 Shares * $20 = 130,000

So, we can calculate the total paid in capital by using following formula:

Total paid in capital = Common stock in patent exchange + Preferred stock value + Common stock issued

= $57,000 + $60,000 + $130,000

= $247,000