Berry Corporation has 50,000 shares of $10 par common stock authorized. The following transactions took place during 2012, the first year of the corporation's existence:

Sold 10,000 shares of common stock for $18 per share.

Issued 10,000 shares of common stock in exchange for a patent valued at $200,000.

At the end of the Berry's first year, total paid-in capital amounted to a. $80,000.

b. $180,000.

c. $200,000.

d. $380,000.

Answer: Option (D) is correct.

Explanation:

(a) Common stock issued for cash:

Cash (10,000 shares @$18) $180,000

To common stock (10,000 shares @$10 par) $100,000

To Adding paid in capital (10,000 shares @$8) $80,000

(b) Common stock issued for patent:

Patent (market value of patent) $200,000

To common stock (10,000 shares @$10 par) $100,000

To Adding paid in capital (10,000 shares @$10) $100,000

(c) At the end of the Berry's first year,

Common stock = $200,000

Adding paid in capital = $180,000

Therefore,

Total paid-in capital = Common stock + Adding paid in capital

= $200,000 + $180,000

= $380,000