In this video on Additional Paid-in Capital on Balance Sheet, we will discuss the definition and how to pass journal entry in accounting.
𝐖𝐡𝐚𝐭 𝐢𝐬 𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐏𝐚𝐢𝐝-𝐢𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐨𝐧 𝐁𝐚𝐥𝐚𝐧𝐜𝐞 𝐒𝐡𝐞𝐞𝐭?
--------------------------------------------------------------------------------------------
Additional paid-in capital (APIC) is the amount on the balance sheet that is the abundance of the par value.
𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐏𝐚𝐢𝐝-𝐢𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠 𝐄𝐧𝐭𝐫𝐲 𝐄𝐱𝐚𝐦𝐩𝐥𝐞
---------------------------------------------------------------------------------------------
Let's assume company S&S Enterprises has following information
At $40 per share, S&S Enterprises issued 20,000 shares. The par value (stock) was kept by them as $6 per share. We need to pass the accounting entry for additional paid-in capital on balance sheet.
No of shares issued = 20,000
Price per share = $40
Total Equity Capital = (20,000 * $40) = $800,000
Total Par Value = (20,000 * $4) = $80,000.
Total APIC = [20,000 * ($40 – $6)] = [20,000 * $34] = $680,000.
Therefore, the journal entry will be as follows :-
Cash A/C…….Dr $800,000 –
To Common Stock A/C – $80,000
To APIC A/C – $680,000
If you want to know more about 𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐏𝐚𝐢𝐝-𝐢𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐨𝐧 𝐁𝐚𝐥𝐚𝐧𝐜𝐞 𝐒𝐡𝐞𝐞𝐭 you can visit the 𝐥𝐢𝐧𝐤 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐡𝐞𝐫𝐞:- [ Ссылка ]
Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - [ Ссылка ]
