Caradonna Company has 100,000 shares of $5 par common stock issued and outstandi
ID: 2563138 • Letter: C
Question
Caradonna Company has 100,000 shares of $5 par common stock issued and outstanding as of January 1, 2015. The shares were originally issued for $22 per share. On February 3, 2015, Caradonna repurchased 5,000 shares at $19 per share for the purposes of retiring them. On April 10, 2015, Caradonna repurchased an additional 2,000 shares at $25 per share. No other transactions involving common stock occurred during the year. What will be the balance in additional paid in capital from retired stock as a result of those transactions?
a. $0
b. $9,000
c. $15,000
d. $21,000
Explanation / Answer
CARADONNA COPMANY Common Stock Additional Paid in Capital Additional Paid in capital on issued of 7000 Shares $ 35,000.00 $ 1,19,000.00 (7,000 * 5) (7,000 * 17) Total Amount collected in additional paid in capital (A) 1,19,000 Repurchase 5000 Shares @ $ 19 $ 25,000.00 $ 70,000.00 (5000 shares * 5) (100,000 * 14) Repurchase 2000 Shares @ $ 25 $ 10,000.00 $ 40,000.00 (2000 shares * 5) (2,000 * 20) Less : Total Amount Paid on Addit. Paid in capital (B) $ 1,10,000.00 Balance in Additional paid in Capital (A-B) $ 9,000.00 Answer = Option B = $ 9,000