What makes up contributed capital

Contributed capital is otherwise called paid-in-capital. On a company's balance sheet, contributed capital is an entry that reflects the amount of a company's stock that is shareholders have purchased. It also indicates the price shareholders have paid for their stake or position in the company. Contributed capital amounts to the total value of a company's stock that have been issued in exchange for cash or assets from shareholders.

Money generated from Initial public offerings IPOs , secondary offerings and direct public offerings make up the contributed capital. However, the total figure will be broken up into two lines:. Anything over the par value is then recorded as additional paid-in capital. HoneySlam, Inc. First, paid-in capital and retained earnings are the major categories of stockholders' equity. Retained earnings are the total amount of net income earned by a corporation after tax since its inception. This figure also leaves out the dividends that have been paid to stockholders since the business started.

Paid-in capital is the amount that the corporation has received from stockholders when issuing its stock. If you need help with paid-in capital, you can post your question or concern on UpCounsel's marketplace. Corporations record contributed capital on initial public offerings and other stock issuances to the public.

They do not, however, record any capital when stock is traded or bought and sold amongst investors. For example, Apple, Inc.