Question

The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information:...

The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information:

Common stock, $3 par value $150,000
Additional paid-in capital—common 850,000


There have been two issues of stock since the corporation began business. What was the average issue price per share of stock? Please walk me step by step.
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Answer #1

Common Stock = $150,000
Additional Paid-in Capital = $850,000
Par Value per share = $3

Number of shares issued = Common Stock / Par Value per share
Number of shares issued = $150,000 / $3
Number of shares issued = 50,000

Total Common Stock Equity = Common Stock + Additional Paid-in Capital
Total Common Stock Equity = $150,000 + $850,000
Total Common Stock Equity = $1,000,000

Average Issue Price per share = Total Common Stock Equity / Number of shares issued
Average Issue Price per share = $1,000,000 / 50,000
Average Issue Price per share = $20.00

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