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How to calculate paid-in capital in excess of par

Asked Jan 31, 2010, 06:48 AM — 4 Answers
Using Par Value Method what is the amount that should appear on Stockholders' Equity for Paid-in Excess of Par for the following:
Issued 10,000 shares of common stock, $1par, at $15 on 1/1/10. Net income for year = $30,000.
During 2011 following transactions occurred:
Reacquired 1000 shares common stock @ $40per share
Sold 200 shares of treasury stock at $50 per share
Sold 500 shares of treasury stock at $34 per share
Retired remaining 300 shares of treasury stock

I was able to figure out the journal entries for each but when I get to the stockholder's statement I don't understand how the book arrived at $126,000 for Paid-in Capital in excess of Par.

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morgaine300's Avatar
morgaine300 Posts: 6,564, Reputation: 1464
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#2

Feb 4, 2010, 09:08 PM
I don't see how they could have gotten that either. The purchase and re-issuing of treasury shares don't affect PIC in excess of par. The retiring of shares will, but won't bring it down to 126K. Net income doesn't affect it either. Only things that affect issued shares affect it.
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tkadd's Avatar
tkadd Posts: 2, Reputation: 10
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#3

Jul 21, 2011, 03:12 PM
How do you calculate Paid-in capitalexcess of par. What is the formula to use.
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pready Posts: 2,262, Reputation: 737
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#4

Jul 21, 2011, 03:55 PM
Purchase price of the stock issued minus the par value of the stock times the number of shares issued.

For example in the first post there was 10,000 shares issued at $15 a share and the par value is $1 a share:

Your paid in capital in excess of par will be 10,000 * (15 - 1) = $140,000
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brianndi's Avatar
brianndi Posts: 1, Reputation: 10
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#5

Feb 24, 2012, 09:18 AM
I have common stock of $100,000 and retained earnings of $150,000 what is the paid in capital?
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