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What should Violet report as total contributed capital

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Question - VIOLET Corporation was incorporated on January 1, 2020 with the following authorized capitalization: (a) 40,000 ordinary shares, no par value, stated value $40 per share (b) 10,000 shares of 5% cumulative preference share, par value $10 per share. During 2020, Violet issued 24,000 ordinary shares for a total consideration of $1,200,000 and 6,000 preference share at $16 per share. In addition, on December 19, 2020, subscriptions for 2,000 preference shares were taken at a purchase price of $17. These subscribed shares were paid for on January 2, 2021.

Required -

Q1. What should Violet report as total contributed capital in its December 31, 2020 statement of financial position?

a. $1,294,000

b. $1,262,000

c. $1,040,000

d. $1,330,000

Q2. How much is the legal capital?

$1,280,000

$1,040,000

$1,296,000

$1,330,000

Q3. How much share premium is to be reported for the year ended, December 31, 2020?

$276,000

$36,000

$290,000

$50,000

Reference no: EM132806670

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