Newly formed S&J Iron Corporation has 50,000 shares of $10 par common stock authorized. On March 1, Year 1, S&J Iron issued 6,000 shares of the stock for $16 per share. On May 2, the company issued an additional 10,000 shares for $18 per share. S&J Iron was not affected by other events during Year 1What is the total amount of capital contributed by the owners?

The total amount of capital contributed by the owners of S&J Iron Corporation is $276,000.

Data and Calculations:

Authorized share capital:

50,000 shares, Common Stock of $10 par

Issued share capital:

March 1, Year 1:

6,000 shares, Common Stock of $10 par = $60,000

Additional Paid-in Capital, 6,000 x $6 =        36,000

May 2, Year 1:

10,000 shares, Common Stock of $10 par = $100,000

Additional Paid-in Capital, 10,000 x $8 =          80,000

Total amount of capital contributed by stockholders:

Common Stock Capital = $160,000 ($60,000 + $100,000)

Additional Paid-in Capital = $116,000 ($36,000 + $80,000)

Thus, the total amount of capital contributed by the owners is $276,000 ($160,000 + $116,000).

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$276,000

Explanation:

The computation of the total amount of capital contributed by the owners is shown below:

= March 1 cash received + May 2 cash received

where,

March 1 cash received is

= 6,000 shares × $16 per share

= $96,000

And, the May 2 cash received is

= 10,000 shares × $18 per share

= $180,000

So, the total amount of capital contributed is

= $180,000 + $96,000

= $276,000

We simply added the two issued amounts so that the accurate amount could come

cash flow statement possibly