Is there a formual for calcualting the Paid in Capital in Excess of par value?
Is there a formual for calcualting the Paid in Capital in Excess of par value?
Yes, it's easy. And there's two ways to do it. The PIC account is the amount it was issued for above the par value, so all you're doing is taking the amount over par and figuring that for the number of shares issued.
For instance, if you issue 1000 shares of $2 par stock for $10. You're issuing it at $10, so that's $10,000. But this must be separated on the books between the stock account and that excess account. The stock account has to be recorded at the $2 par amount, or $2000. That makes the excess the other $8000. That's the amount above par you issued for.
You can also take $8 excess per share (10 - 2) x 1000. Still $8000 either way.
Thank you for your help.
The stockholders’ equity section of Zacman Company’s balance sheet as of April 1 follows. On April 2, Zacman declares and distributes a 10% stock dividend. The stock’s per share market value on April 2 is $25 (prior to the dividend).
Common stock—$5 par value, 375,000 shares authorized, 150,000 shares issued and outstanding $ 750,000
Paid-in capital in excess of par value, common stock 352,500
Retained earnings 633,000
Total stockholders' equity $ 1,735,500
what is the Paid-in capital in excess of par value, common stock?
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