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Echota Corporation has the following capital stock outstanding at December 31, 2020: 7% Preferred stock, $100 par value, cumulative 15,000 shares issued and outstanding $1,500,000 Common stock, no par, $10 stated value, 500,000 shares authorized, 350,000 shares issued and outstanding 3,500,000 The preferred stock was issued at $120 per share. The common stock was issued at an average per share price of $14. Prepare the paid-in capital section of the balance sheet at December 31, 2020. (Enter the account name only and do not provide the descriptive information provided in the question.)

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abiolataiwo2015

Answer:

$6,700,000

Explanation:

Preparation of the paid-in capital section of the balance sheet at December 31, 2020.

Paid-in capital section of the balance sheet at December 31, 2020

7% Preferred stock, $100 par value, cumulative15,000 shares issued and outstanding $1,500,000

Add Common stock, no par, $10 stated value, 500,000 shares authorized, 350,000 shares issued andoutstanding 3,500,000

Total capital stock5,000,000

($1,500,000+3,500,000)

Add Additional paid-in capitalIn excess of par—preferred stock$ 300,000

(15,000 shares × $20 )

Add In excess of stated value—common stock1,400,000

(350,000 shares × $4)

Total paid-in capital$6,700,000

Therefore the paid-in capital section of the balance sheet at December 31, 2020 is $6,700,000