S10-5

(Learning Objective 2: Describe the effect of a stock issuance on paid-in capital) ARM received $48,000,000 for the issuance of its stock on May 14. The par value of the ARM stock was only $48,000. Was the excess amount of $47,952,000 a profit to ARM? If not, what was it?

Suppose the par value of the ARM stock had been $4 per share, $8 per share, or $14 per share. Would a change in the par value of the company