D is corrent. All three transaction increase additional paid-in capital (APIC) because they involve the issuance of common stock for an amount above par value. The January 10 transaction increases APIC by $50,000 [25,000 × ($22 – $20)]. The March 25 transaction increases APIC by $4,000 [1,000 × ($24 – $20)] because the transaction is valued at the FV of the services or the FV of the stock, whichever is more clearly determinable. Similarly, the September 30 transaction increases APIC by $30,000 [5,000 × ($26 – $20)]. Therefore, Ashe should report APIC of $84,000 ($50,000 + $4,000 + $30,000) at 12/31/Y1.
A is incorrect. All three transaction increase additional paid-in capital (APIC) because they involve the issuance of common stock for an amount above par value. The January 10 transaction increases APIC by $50,000 [25,000 × ($22 – $20)]. The March 25 transaction increases APIC by $4,000 [1,000 × ($24 – $20)] because the transaction is valued at the FV of the services or the FV of the stock, whichever is more clearly determinable. Similarly, the September 30 transaction increases APIC by $30,000 [5,000 × ($26 – $20)]. Therefore, Ashe should report APIC of $84,000 ($50,000 + $4,000 + $30,000) at 12/31/Y1.
B is incorrect. All three transaction increase additional paid-in capital (APIC) because they involve the issuance of common stock for an amount above par value. The January 10 transaction increases APIC by $50,000 [25,000 × ($22 – $20)]. The March 25 transaction increases APIC by $4,000 [1,000 × ($24 – $20)] because the transaction is valued at the FV of the services or the FV of the stock, whichever is more clearly determinable. Similarly, the September 30 transaction increases APIC by $30,000 [5,000 × ($26 – $20)]. Therefore, Ashe should report APIC of $84,000 ($50,000 + $4,000 + $30,000) at 12/31/Y1.
C is incorrect. All three transaction increase additional paid-in capital (APIC) because they involve the issuance of common stock for an amount above par value. The January 10 transaction increases APIC by $50,000 [25,000 × ($22 – $20)]. The March 25 transaction increases APIC by $4,000 [1,000 × ($24 – $20)] because the transaction is valued at the FV of the services or the FV of the stock, whichever is more clearly determinable. Similarly, the September 30 transaction increases APIC by $30,000 [5,000 × ($26 – $20)]. Therefore, Ashe should report APIC of $84,000 ($50,000 + $4,000 + $30,000) at 12/31/Y1.
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