Question

If Vickers Company issues 5,000 shares of $5 par value common stock for $175,000, A. Paid-In Capital in Excess of Par will be credited for $150,000. B. Common Stock will be credited for $175,000. C. Cash will be debited for $150,000. D. Paid-In Capital in Excess of Par will be credited for $25,000.

Answer 1

Answer:

option A is correct

Paid-In Capital in Excess of Par will be credited for $150,000

Explanation:

Given data

share = 5000

share value = $5 / common stock

cash = $175000

to find out

find the option which is correct

solution

we know here we have cash value $175000

and

total common stock is = share × share value

total common stock  =5000 × 5

total common stock value is $25000

so paid capital in excess = cash - total common stock value

paid capital in excess = 175000 - 25000

paid capital in excess is $150000

so option A is correct

Paid-In Capital in Excess of Par will be credited for $150,000