Question

The following accounts and their balances were selected from the adjusted trial balance of Point Loma Group Inc., a freight forwarder, at October 31, the end of the current fiscal year:

Common Stock, no par, $14 stated value	$420,000
Paid-In Capital from Sale of Treasury Stock	252,000
Paid-In Capital in Excess of Par—Preferred Stock	72,000
Paid-In Capital in Excess of Stated Value—Common Stock	1,008,000
Preferred 2% Stock, $120 par	600,000
Retained Earnings	3,105,000

Prepare the Paid-In Capital portion of the Stockholders' Equity section of the balance sheet using  Method 1 of Exhibit 8. There are 100,000 shares of common stock authorized and 13,000 shares of preferred stock authorized.

Point Loma Group Inc.,
Stockholders' Equity
October 31, 20XX
Paid-in Capital:
Preferred 2% Stock, $120 Par (13,000 Shares Authorized, 5,000 Shares Issued)	$600,000
Excess over par		$72,000
Paid-in capital, preferred stock		$672,000
Common Stock, No Par, $5 Stated Value (100,000 Shares Authorized, 30,000 Shares Issued)	$420,000
Excess over par	$1,008,000
Paid-in capital, common stock		$1,428,000
From Sale of Treasury Stock		$252,000
Total Paid-In Capital		$

I am looking for the total paid-in capital amount. I have completed the rest of the table but am unsure what numbers give me this number.

Answer 1

Point Loma group Inc

Paid-In Capital portion of the Stockholders' Equity section

	Amount ($)	Amount ($)
Paid in capital:
Common stock, $ 14 par (100,000 shares authorized      30,000 shares issued	$            420,000
Excess over par	$        1,008,000
Paid in capital common stock		$        1,428,000
Add: From sale of treasury stock		$            252,000
Total paid-in-capital, common (A)		$        1,680,000
Preferred 2%, $ 120 par (13,000 shares authorized      5000 issued)	$            600,000
Excess over par	$              72,000
Paid in capital, preferred (B)		$            672,000
Total Paid in capital (A + B)		$        2,352,000

Your solution is correct.

Treasury stock are those shares which are bought back by the company reducing number of shares outstanding on open market. These are to be added to issued shares to arrive at paid-in capital portion of equity shares.

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