Contributed capital, also known as paid-in capital, refers to the total value of cash and other assets that shareholders have directly invested in a company in exchange for stock. This equity portion represents funds that are raised and used for the growth and operational needs of the business.
Paid-in capital represents the amount of money a company has received from shareholders in exchange for shares of stock, encompassing the funds received from stock issuance, premiums or discounts on stocks sold, stock donations, and the resale of treasury stock.
Paid-In Capital Surplus represents capital received from investors in exchange for stock. It is distinguished from capital generated from earnings or donations and includes capital stock and contributions from stockholders that are credited to accounts other than capital stock, such as an excess over par value.
Premium on capital stock refers to the excess amount received from stockholders over the par value of the stock issued. It is reflected in the balance sheet under the paid-in-capital section of stockholders' equity and should not be regarded as income.
