Dakora Corp. issued 1,000 shares of its $10 par common stock to Kiora as compensation for 500 hours of appraisal services performed. Kiora's billing rate is $50 per hour for appraisal services. On the date of issuance, the stock was trading for $30 per share. By what amount, if any, should Dakora's additional paid-in capital account increase?

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Quizplus · Accepted Answer

The additional paid-in capital increases by the amount over the par value. The stock was issued at $30 per share, with a par value of $10, so the additional paid-in capital per share is $20 ($30 - $10). For 1,000 shares, this totals $20,000 ($20 * 1,000).