The following data should be used in solving Questions 27, 28, 29 and 30. Each o

Question

The following data should be used in solving Questions 27, 28, 29 and 30. Each of the questions is mutually exclusive of the other questions. Alpha Corporation has the following Shareholders' Equity section of the Balance Sheet at 1/1/2004: Preferred Stock, 10%, $100 Par Value, 10,000 shares $ 100 authorized, 1,000 issued, and outstanding Additional Paid In Capital/Preferred Stock Common Stock, $10 Par Value, 100,000 shares authorized, 240,000 500,000 50,000 shares issued and outstanding Additional Paid In Capital /Common Stock $1,640,000 Total Paid In Capital Retained Earnings Total Shareholders/ Equity 0 $ 3,640,000 uestions 27 Stockholders' Equity): ssume Alpha sells 500 shares of Preferred Stock for $400 per share. What will be the dollar nount of the increase to Preferred Stock, APIC- Preferred Stock, and Retained Earnings? Increase APIC/PStk Increase PStk 200,000 150,000 a. b. 50,000 0

Explanation / Answer

27. Dollar amount of increase to Preferred Stock = 500 x $ 100 = $ 50,000.

Dollar amount of increase to APIC: Preferred Stock = 500 x $ 300 = $ 150,000

Dollar amount of increase to Retained Earnings : $ 0.

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