When a firm issues 50,000 shares with a par value of $5 for $22 per share,additional paid-in capital will:
A) decrease by $250,000.
B) increase by $250,000.
C) increase by $850,000.
D) increase by $1,100,000.

Question

Quizplus · Accepted Answer

The additional paid-in capital is calculated as the difference between the issue price and the par value, multiplied by the number of shares: ($22 - $5) * 50,000 = $850,000.

When a Firm Issues 50,000 Shares with a Par Value