What should be reported as additional paid-in capital

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Question 1: The XYZ partnership has inventory (book value of $200,000 and fair value of $220,000) and fixed assets (book value of $800,000 and fair value of $880,000). It has no other assets. The partnership also has liabilities with both a book value and fair value of $300,000. Partnership capital is recorded as $700,000. The three partners are currently incorporating this business and plan to issue 10,000 shares of $10 par value common stock to each individual. In setting up the opening account balances for the new corporation, what should be reported as additional paid-in capital ?

Option 1: $500,000

Option 2: $100,000

Option 3: Zero

Option 4: $400,000

Reference no: EM132586499

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