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A corporation has the following account balances: Common Stock, $2 par value, $40,000; Paid-in Capital in...

A corporation has the following account balances: Common Stock, $2 par value, $40,000; Paid-in Capital in Excess of Par Value, $1,800,000. Based on this information, the

a. legal capital is $1,840,000.

b. number of shares issued is 40,000.

c. number of shares outstanding is 1,840,000.

d. average price per share issued is $92.
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Answer #1

Ans:

a.) Option a is Incorrect because legal caoital is the Paid up COmmon STock Par Value which is $40,000.

b.) Option B is Incorrect because Number of Shares Issued are $40,000 / $2 = 20,000.

c.) Option C is Incorrect becuase number of shares outstanding are 20,000.

d.) Option D is Correct because issue price is : $1,800,000 + $40,000 = $1,840,000 and number of shares issued : 20,000. Issue Price per share : $1,840,000/ 20,000 = $92.

So correct answer is Option D.

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