Sandoz Corporation was organized on January 1, 2015, with authorized capital of 500,000 shares of $10 par value common stock. During 2015, Sandoz issued 30,000 shares at $12 per share, purchased 3,000 shares of treasury stock at $13 per share, and sold 3,000 shares of treasury stock at $14 per share. What is the amount of additional paid-in capital at December 31, 2015?

Question

Quizplus · Accepted Answer

- The authorized capital is not relevant to calculating additional paid-in capital. It is just the maximum number of shares that can be issued.
- The number of shares sold and purchased from treasury stock are relevant, but the prices at which they were bought or sold are not.
- To calculate additional paid-in capital, we need to compare the amount of cash received from the issuance of common stock ($360,000 = 30,000 shares x $12 per share) with the par value of that stock ($300,000 = 30,000 shares x $10 par value per share). The difference is the amount of additional paid-in capital:

$360,000 - $300,000 = $60,000

Therefore, the correct answer is D) $63,000.

Sandoz Corporation Was Organized on January 1, 2015, with Authorized