G. Jones Corporation was organized on January 1 2017 with authorized capital of 1000000 shares of $10 par value common stock. During 2017 Jones issued 40000 shares at $12 per share purchased 4000 shares of treasury stock at $13 per share and sold 4000 shares of treasury stock at $14 per share. What is the amount of additional paid-in capital at December 31 2017?

Question

Quizplus · Accepted Answer

- Jones Corporation issued 40,000 shares at $12 per share, which means they received 40,000 x $12 = $480,000 in proceeds. The par value of these shares is $10 x 40,000 = $400,000, so there is an additional paid-in capital of $480,000 - $400,000 = $80,000.
- Jones Corporation purchased 4,000 shares of treasury stock at $13 per share, which means they used $52,000 (4,000 x $13) of cash to buy these shares. There is no effect on additional paid-in capital when a company buys treasury stock.
- Jones Corporation sold 4,000 shares of treasury stock at $14 per share, which means they received $56,000 (4,000 x $14) in proceeds. There is no effect on additional paid-in capital when a company sells treasury stock.

Therefore, the total additional paid-in capital at December 31, 2017 is the additional paid-in capital from the issuance of shares, which is $80,000. Answer choice D is correct.

G Jones Corporation Was Organized on January 1 2017 with Authorized