was organized on January 1, 2021. The firm was authorized to issue 170,000 shares of $5 par value common stock. During 2021, Ginger Hardware had the following transactions relating to stockholders' equity: Issued 51,000 shares of common stock at $7 per share. Issued 34,000 shares of common stock at $8 per share. Reported a net income of $170,000. Paid dividends of $85,000. What is total paid-in capital at the end of 2021

Balance sheet extract as at 31st December, 2021

Common stock ($255,000+$155,000) $410,000

Paid in capital in excess of par ($102,000+$93000) $195,000

Total paid in capital $605,000

Retained earnings ($170,000-$85,000) $85,000

Shareholders equity $690,000

Explanation:

The issue of 51,000 shares issue would result in cash proceeds of $357,000 with $255,000 recorded in Common stock account and the balance of $102,000 shown in paid-in capital in excess of par.

The issuance of 34,000 shares would increase cash account by $248,000 while the common stock account and paid-in capital in excess of par would witness increase of $155,000 and $93,000 respectively.

The net income would be reduced by the amount of dividends declared.