{"id":203337,"date":"2025-03-19T05:34:53","date_gmt":"2025-03-19T05:34:53","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=203337"},"modified":"2025-03-19T05:34:55","modified_gmt":"2025-03-19T05:34:55","slug":"a-company-issued-150-shares-of-100-par-value-stock-for-34000-cash","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/19\/a-company-issued-150-shares-of-100-par-value-stock-for-34000-cash\/","title":{"rendered":"A company issued 150 shares of $ 100 par value stock for $ 34,000 cash"},"content":{"rendered":"\n

A company issued 150 shares of $ 100 par value stock for $ 34,000 cash. The total amount of paid-in capital in excess of par is:<\/p>\n\n\n\n

$100<\/p>\n\n\n\n

$ 1,500<\/p>\n\n\n\n

$ 19,000<\/p>\n\n\n\n

$ 15,000<\/p>\n\n\n\n

$ 34,000<\/p>\n\n\n\n

The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n

The correct answer is $19,000<\/strong>.<\/p>\n\n\n\n

Explanation:<\/h3>\n\n\n\n

When a company issues shares, it can sell them at a price higher than their par value. The difference between the selling price (issue price) and the par value is called paid-in capital in excess of par<\/strong> or additional paid-in capital (APIC)<\/strong>.<\/p>\n\n\n\n

Step 1: Calculate the Total Par Value<\/h4>\n\n\n\n

Each share has a par value of $100<\/strong>, and the company issued 150 shares<\/strong>.<\/p>\n\n\n\n

[
\\text{Total Par Value} = 150 \\times 100 = 15,000
]<\/p>\n\n\n\n

Step 2: Determine the Total Cash Received<\/h4>\n\n\n\n

The company issued the 150 shares for $34,000<\/strong> in total.<\/p>\n\n\n\n

Step 3: Compute the Paid-in Capital in Excess of Par<\/h4>\n\n\n\n

The paid-in capital in excess of par is calculated as:<\/p>\n\n\n\n

[
\\text{Total Cash Received} – \\text{Total Par Value}
]<\/p>\n\n\n\n

[
34,000 – 15,000 = 19,000
]<\/p>\n\n\n\n

So, the additional paid-in capital (APIC) is $19,000<\/strong>.<\/p>\n\n\n\n

Understanding the Concept<\/h3>\n\n\n\n
    \n
  • Par Value<\/strong> is the minimum price assigned to a share by the company, often set at a low amount. It does not reflect the market value.<\/li>\n\n\n\n
  • Issue Price<\/strong> is the actual price at which shares are sold to investors. It can be higher than the par value.<\/li>\n\n\n\n
  • Paid-in Capital in Excess of Par<\/strong> represents the extra amount investors pay over the par value, which goes into the company’s equity.<\/li>\n<\/ul>\n\n\n\n

    Answer Choice Analysis<\/h3>\n\n\n\n
      \n
    • $100<\/strong> \u2013 Incorrect (this is too small).<\/li>\n\n\n\n
    • $1,500<\/strong> \u2013 Incorrect (miscalculated).<\/li>\n\n\n\n
    • $19,000<\/strong> \u2013 Correct<\/strong> (as shown in the calculations).<\/li>\n\n\n\n
    • $15,000<\/strong> \u2013 Incorrect (this is the total par value, not the excess capital).<\/li>\n\n\n\n
    • $34,000<\/strong> \u2013 Incorrect (this is the total cash received, not the excess capital).<\/li>\n<\/ul>\n\n\n\n

      Thus, the correct answer is $19,000<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

      A company issued 150 shares of $ 100 par value stock for $ 34,000 cash. The total amount of paid-in capital in excess of par is: $100 $ 1,500 $ 19,000 $ 15,000 $ 34,000 The correct answer and explanation is : The correct answer is $19,000. Explanation: When a company issues shares, it can […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-203337","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/203337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=203337"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/203337\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=203337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=203337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=203337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}