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22 January, 16:03

Preferred Stock, 7%, $115 par $1,170,000 Common Stock, $1.50 par 300,000 Paid in capital in excess of par, common stock 1,200,000 Retained earnings 2.500.000 Total $5,170,000 Based on the information above, how many shares of common stock are classified as issued?

A. 1,500,000

B. 1,000,000

C. 300,000

D. 200,000

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Answers (1)
  1. 22 January, 18:55
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    D. 200,000

    Explanation:

    As per given information

    Preferred Stock, 7%, $115 par $1,170,000

    Common Stock, $1.50 par $300,000

    Paid in capital in excess of par, common stock $1,200,000

    Retained earnings $2,500,000

    Total $5,170,000

    As common stock is reported on the par value we can calculate the number of share by simply dividing total value with par value.

    Common Stock = $300,000

    Number of shares = Common stock paid in capital / Par value

    Number of shares = $300,000 / $1.50

    Number of shares = 200,000 shares

    200,000 share are classified as issued shares.
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