Common Products has just made its first issue of stock. It raised $1.3 million b

Question

Common Products has just made its first issue of stock. It raised $1.3 million by selling 250,000 shares of stock to the public. These are the only shares outstanding. The par value of each share was $2. Complete the following table:

Common stock (par value) $     

Additional paid-in capita $     

Retained earnings $      

Net common equity $1,800,000   

Common Products has just made its first issue of stock. It raised $1.3 million by selling 250,000 shares of stock to the public. These are the only shares outstanding. The par value of each share was $2. Complete the following table:

Common stock (par value) $     

Additional paid-in capita $     

Retained earnings $      

Net common equity $1,800,000   

Explanation / Answer

DETAILS AMOUNT COMMON STOCK (PAR VALUE) [250000 * $2] $500000 ADDITIONAL PAID IN CAPITAL ($1300000 - $500000) $800000 RETAINED EARNINGS ($1800000 - $800000 - $500000) $500000 NET COMMON EQUITY $1800000

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