Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h).
-Excess of Issue Price over Par
(Preferred) = Excess Price of Preferred Stock × Number of Shares of Preferred Stock Issued =
($70 - $50) × 3,000 = $20 × 3,000 = $60,000
A)Treasury stock
B)Retained earnings
C)Preferred stock
D)Excess of issue price over par (preferred)
E)Common stock
F)Total paid-in capital
G)Excess of issue price over par (common)
H)Total stockholders' equity

Question

Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h).
-Excess of Issue Price over Par 
(Preferred) = Excess Price of Preferred Stock × Number of Shares of Preferred Stock Issued = 
($70 - $50) × 3,000 = $20 × 3,000 = $60,000
A)Treasury stock
B)Retained earnings
C)Preferred stock
D)Excess of issue price over par (preferred)
E)Common stock
F)Total paid-in capital
G)Excess of issue price over par (common)
H)Total stockholders' equity

Quizplus · Accepted Answer

The calculation provided directly matches the definition of "Excess of issue price over par (preferred)," which is the additional amount paid by shareholders over the par value of the preferred stock. This is calculated as the difference between the issue price and the par value, multiplied by the number of shares issued.

Assume That Retained Earnings Had a Beginning Balance of $75,000