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    master0023's Avatar
    master0023 Posts: 1, Reputation: 1
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    #1

    Feb 7, 2013, 08:17 PM
    shareholder's equity problem
    Ordinary share, 5 stated value, 500,000 shares authorized,100,000 shares issued...
    Share premium ordinary, $600,000


    Question:compute for the legal capital..
    debitcreditAly's Avatar
    debitcreditAly Posts: 2, Reputation: 1
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    #2

    Mar 17, 2013, 04:07 AM
    The answer is $1,100,000. Since the ordinary share is a no-par share, the additional paid-in capital/share premium of $600,000 shall be included. Now, if the ordinary shares have par, the share premium shall be ignored. Also note that the subscribed share capital is also part of the legal capital whether it is a no-par, or par-share.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #3

    Mar 17, 2013, 08:02 AM
    You will have two parts. First is for Common Stock and the amount will be; number of shares issued and outstanding times the par value of the stock.

    The second part will be the difference between the total amount received and the Common Stock amount and will be recorded as Additional Paid-in Capital.

    If there is no stated value or par value of the stock, then the total amount of money received from the issuance of the stock will be listed as Common Stock.
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