Capital stock is the number of common and preferred shares that a company is authorized to issue, and is recorded in shareholders' equity. Upon issuance, common stock is generally recorded at its fair value, which is typically the amount of proceeds received.Solved: Working on an scorp balance sheet and I'm not sure if I'm entering Capital Stock and Additional PaidIn Capital correctly. Capitalization is an accounting method in which a cost is included in an asset's value and expensed over the asset's useful life. Capital can be infused in the Company in two ways. Either in the form of Debt or in the form of Equity which could be common or preferred equity. Capital stock is the common stock and preferred stock that a company is allowed to issue according to its corporate charter. Learn what capital is on a balance sheet and how to calculate working capital using a simple formula in order to understand your company's finances. 19 Capital stock or principal fund. Translation of financial statements originally issued in Spanish.